Headline numbers from today's jobs report
looked great. Unemployment fell to 7.8 percent, non-farm payrolls came in line with expectations, and last month's number was revised up.This prompted some to claim the numbers were made up
. President Obama said, "this morning we found out that the unemployment rate has fallen to its lowest rate since I took office."
But Gluskin Sheff's David Rosenberg
didn't paint such a rosy picture of the report and had a very specific response to any such claim:
"That the 7.8 percent jobless rate takes it to the level that prevailed when the President took office in January 2009 has raised many an eyebrow. I don't believe in conspiracy theories. But I don't believe in the Household Survey either.
This notoriously volatile indicator has become even more so in recent months. It showed a 195K slide in July and a 119K decline in August, to only then reveal a massive 873K surge in September. So, aced on a household employment, the economy was in a recession in July and August and the miraculously boomed at its strongest rate since January 1983 (is Obama really the new Reagan)?
If it's too good to be true, then it probably is.
But this is why the headline unemployment plunged, and that is what is very likely to make the front pages of the Saturday newspapers. Digging beneath the veneer, the quality of these so-called Household jobs is called into question, seeing as part-time work for 'economic reasons' dominated with a 582K run-up in September. And upon closer inspection of the actual amount of slack in the labor market, the more inclusive U6 unemployment rate that does a much better job at capturing underemployment remain stubbornly stuck at 14.7%."