We'll get the normal "day ahead' stuff out of the way in a paragraph today because I spent most of my writing time on something I otherwise wasn't going to get to.
There's not much to say about bond markets that continue trading in a range (marked by 2.66% 10yr yields on the high side and something less clearly delineated underfoot. It could be as low as 2.40, but key levels at 2.57 and 2.47 would need to be broken first. We're right at the 2.57 mark in early overnight trading. Perhaps this afternoon's FOMC Minutes will offer some guidance. Apart from that and the 1pm 10yr Treasury auction, the calendar is generally empty.
Now for those "special NFP reflections."
There's a problem in the media world. For all I know it's been growing since before I was born and will probably get worse before it gets better. I'm talking about sensationalism.
The more efficient we, as humans, get at creating and digesting news, the less and less interesting the same old news becomes. The problem is: it's always the same old news. It always will be (in general).
Very rarely is there a glorious, scandalous new insight in the world of finance and economics, but media has learned that you're more likely to pay attention if they pretend like EVERY day holds a new and excitingly glorious scandal.
This is sensation-seeking (and peddling) at it's finest. Instead of "Eat Well, Exercise, and Get Plenty of Sleep," we're bombarded with "Three weird tricks that will completely revolutionize your life" and the like.
It's one thing for sites like Huffpost, etc to do this. But it's irresponsible for seemingly objective finance/econ sites to do it. I don't even think most of them do it intentionally, it's just that there's so, so, sooooo very much utterly boring and useless data spewed forth with major economic releases that very few people are actually going to take the time to crunch the numbers required to refute what might viscerally seem like biased claims.
It's normally easier just to ignore those seemingly biased claims, especially when they're contrarian or otherwise seem to appeal to our innate interest in scandal, conspiracy, and ideological inertia (our tendency to push back against new ideas or against facts that run counter to our current beliefs).
For those reasons, I can understand why some of the analysis of the most recent jobs report that characterizes it as a "harbinger of unforeseen economic doom due to rampant full-time job losses disguised as a massive beat due to the evil BLS's manipulative data-rigging" has enjoyed immediate popularity!
After all, we love a good scandal. We love to push back against the establishment. It's easier to be an unpleasant cynic than to be a consensus builder. It's fashionable to hate everything about the government (this one might not be that irrational, depending on your definition of hate). And last but not least, the recovery doesn't look and feel like normal historical examples of recoveries, so anything that validates that gut feeling echoes with the ring of verisimilitude right out of the gate.
As it turns out, there's a grey area with the NFP data. There's almost always some sort of grey area with almost any report. NFP especially, is so colossal, that it really just depends how hard you want to dig and what your predisposition is. You can always find a way to prove your point if you have a point to prove!
In the current case, I don't have a point to prove as it concerns the goodness or badness of the data. I do, however, have a roughly equal problem with cheerleaders and default conspiracy theorists. The worst subsection of both categories are those that follow their banner blindly, without even attempting to identify the counterpoint.
It's funny... The post-NFP analysis I've seen has generally lambasted the ignorance of the mainstream, cheerleader opinions. But best I can tell, those conspiracy theorist naysayers are the mainstream in this case! When 17 econo-blogs and the New York frickin' Times are pointing out the "yeah buts" in the report's internals, it's no longer avant garde to do the same--no matter how indignant you manage to come across.
Apologies to friends and family with Apple products, but this is how I view the "i" culture. It was counterculture that got so popular that now Android/PC is counterculture. For the record, and in the spirit of counterpoints, my wife and colleagues say "yeah, because Apple stuff WORKS!" Maybe they're right. Maybe it depends on the person.
All this to say, I dug in to the seedy underbelly of the survey data that seems to have caused some of the indignation this week, and wouldn't you know it, there are shades of grey!
In fact, the most interesting statistic that completely disarms the full-time employment red flags is that through June of last year, net, unadjusted, full-time payrolls for the "16 and over" cohort (that's everyone they count) was 187k. Through June of this year it was 677k. Read that fourteen times if you need to. Once again, THERE ARE MORE THAN THREE TIMES AS MANY FULL-TIME JOBS CREATED IN THE FIRST HALF OF 2014 VS 2013 ON AN UNADJUSTED BASIS.
I will post the rest of the raw data tomorrow morning, but suffice it to say that the seasonal adjustments are out of whack. This is side-splittingly ironic considering the conspiracy crowd usually DETESTS the very idea of seasonal adjustments--claiming the cheerleaders and crooked government uses them to manipulate numbers to look better than they are--yet their current conclusions are based on those very same seasonal adjustments!
To be sure, I won't be bringing you a mainstream conclusion to do battle with conspiracy conclusions--just some balance that explains how either side can be right depending on where they want to focus their attention. The implied lesson is to mete your trust judiciously when it comes to forming opinions on what's going on, and do your own research when at all possible.
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