streettalklive.com / By Lance Roberts / December 7, 2012
In my November 5th report on employment I stated: “…when taking into account the recent slate of economic weakness, post-election we are likely to see many of the recent job gains revised away as the data aligns itself with overall economic activity. The STA composite employment index is likewise pointing towards higher jobless claims numbers in the months ahead and falling export orders will continue to impact corporate profitability and their need to increase employment.” Since that time jobless claims did indeed rise, and with the release of the November jobs report, we saw the previous two month’s gains in employment revised down by a total of 49,000. October employment of 171,000 was revised to just a 138,000 advance while September was brought down to 132,000 from 148,000.
What is important to remember is that the BLS only publishes revisions to the prior two months even though it has data for months prior. This is why the annual revisions to the employment data can be significant. Furthermore, given the weakness in the employment components of the major economic surveys, as shown by my composite employment index, we should expect to see negative revisions to the 2012 data employment data next year.
There has been much debate about whether the domestic economy is in a recession. A bulk of the arguments against recession are based on the four primary indicators used by the National Bureau of Economic Research (NBER) who officially date the beginning and end of recessionary periods. The inherent problem with this analysis is that the data is subject to annual revisions, which the NBER waits for before determining recessions, which potentially leads to a significant lag in the final determination of the recession. The chart below shows recessions and the announcement dates by the NBER.