Correcting the erroneous spin spread by Steve Liesman of CNBC following last Friday's terrible NFP jobs report, John Mauldin wrote the following this past weekend:
There are two unemployment surveys. One is for businesses, called the establishment survey, and for whatever reason that is the one most people pay attention to. When they do the household survey, they found that the number of employed people fell by 617,000 last month, spiking the unemployment rate to 5.5%. Some on CNBC said it was just teenage unemployment showing up in the numbers, but that is not true. Teens... accounted for just 0.2% of the rise. Adult unemployment rose to 4.8% and accounted for 0.3% of the rise. (By the way, technically, for the three people with no social life actually watching the scorecards, the household survey dropped 250,000 jobs; but after you adjust for factors in the establishment survey and seasonally adjust, you get 617,000.)
Wages declined by 0.2 in April in nominal terms, and forget about it in real, after inflation numbers. David Rosenberg of Merrill Lynch notes that the 0.2% decline in real spending on durables and semi-durables was the 6th decline in a row, which has never happened in the 49 years that such data has been tracked.
When Bubbles Collide
So what's the truth? Did Liesman get it wrong? Based upon tax records from States and the Federal Government, people are earning less and tax receipts by the States are falling significantly, suggesting lower employment and thus, fewer receipts by the States from income taxes. "In short, wherever you look, tax receipts are down. That means income and sales are down. There is no spin that trumps tax receipts," Mauldin says.
