8/8/2019 Mike Astrachan - Follow Up: Employment is Rising Fast

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Follow up: Employment Is Growing Fast

By Mike Astrachan 09/21/2010

Payroll employment data from the establishment survey show employment growth

in the private sector of less than 100,000 per month this year, leading to the conclusion that

the economy is growing too slowly to reduce unemployment. In contrast, the data from the

less publicized household survey show employment in the private sector growing this year at

almost 300,000 per month. Last month it soared 891,000 thousand.

As noted before in [Employment is Rising Fast] around economic turning point the

household data are more reliable and usually lead the establishment data. For example, in

seven out of eight turning points associated with the last four recessions -- four downturns

around the beginning of the recessions and four upturns around the ends of the recessionsand the beginning of the recoveries -- the peaks and troughs of the household employment

data preceded the corresponding peaks and troughs of the establishment employment data.

Still, to lend credence to the private sector employment data from the household

survey and particularly the outstanding figure for August, it might be useful to look for other,

indirectly supporting data. In very general terms such data are also supportive of the notion

of improved employment gains in August. Thus, the Challenger job cut figures show a

significant drop in August to a new post- recession low. Similarly, according to the

Conference Board, the number of new online help wanted ads, marked a new post-

recession high in August. Some weekly data also point in the same direction, including thedowntrend of initial unemployment claims, from its peak in mid-August. This trend, albeit

still tentative, seems to align with the findings of ISI in its company surveys. These show an

almost vertical rise in sales of temporary and permanent placement companies. All in all it

appears that the August data are what they are and not a fluke.

8/8/2019 Mike Astrachan - Follow Up: Employment is Rising Fast

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The Stock Market

When the August household employment data came out early this month they were

sufficiently strong to conclude that the stock market will break out of its three monthstrading range on the upside [ Employment in the US does increase],[ Employment is

Rising Fast]. To the abnormally long list of severe risks discussed earlier, however, one may

have to add the fact that commodity prices -- particularly agricultural, are shooting up. This

may increase inflation in China and cause a delay in easing their policies which the world and

particularly the U.S. need. Or, it may force the hand of the Chinese and cause them to fight

inflation by raising the Yuan, which would be helpful for the rest of the world.

This article was written by Mike Astrachan. You welcome to visit his blog at:

www.mikeastrachan.com