04 February 2012

Charles Biderman on the US Non-Farm Payrolls Report

I spend a great deal of time looking at the various government reports, and especially the Payrolls report as you know. I keep my own spreadsheets with their data, and measure various changes in the way in which they calculate the seasonal adjustment factors, imaginary jobs, and prior revisions.

If I wish to leave you with one takeway, it is that the current use of the monthly headline number is more of a Sales and PR program for Wall Street and the government, and hardly the product of serious and thoughtful analysis of statistical data.

The US economy is on a flatline from all that I can tell. I suspect that if a double dip occurs it will be blamed on Europe or some other factor. but in fact there has been no real recovery as of yet.

There is a yawning discrepancy between the bond and equity markets in the manner in which they are interpreting the data. And one of them is wrong. Based on my experience, it is the bond guys who are most always the adults in the room.

Still, the markets are what they are, and it does not pay to fight the tape ahead of its season. Wall Street and its Banks have shown a marvelous ability to create paper rallies out of nothing and sustain them for quite some time before their inevitable collapse.

The US economy can recover. The system can be repaired. But I do not see the effort required to perform that task coming out of New York or Washington yet. They may be talking a good game, but it looks like just more of the same.