Mish's Global Economic Trend Analysis

Rush to Judgment and Extremely Inaccurate Reporting
Trends in Employment: What Age Groups Get the Jobs?
Diving Into the Payroll Report: Establishment +295K Jobs; Household +96K Employment, Labor Force -178K
No, No, No Says Draghi to Greece; Spanish Economy Minister Insists 3rd Bailout Talks Underway

Rush to Judgment and Extremely Inaccurate Reporting

Posted: 06 Mar 2015 07:35 PM PST

Rush to Judgment

The moment Russian opposition leader Boris Nemtsov was gunned down last Friday, Western media rushed to judgment. Heck, even friends who should know better rushed to judgment.

One friend sent me the New York Times article After Boris Nemtsov's Assassination, 'There Are No Longer Any Limits' along with this comment:

"The world cannot stand by and let the formula of repression and stealth special forces intervention and sowing contrived disruption succeed, as next there will be little green men in the Baltic states sowing dissention -- we are not going to go through a rinse, repeat and shampoo cycle again in those countries."

I replied...

The headline is ridiculous because

No one knows who did it.
It's none of our business anyway
If we have any moral responsibility it should not be to corrupt puppet governments, but rather the people of Ukraine
The people of Ukraine do not need 4 more years of war nor a mass US invasion
The people of the US do not need and cannot afford a war with Russia

To which I heard "Of course you think the US did it. That was predictable. One does not need to think too hard to figure out what happened here. There is a clear pattern. Europe and the liberal world order are too precious. This has to stop now."

If that's not rush to judgment, what is?

Numerous Possibilities

It would not surprise me in the least to find out the US or Ukraine had some involvement in this. Given disastrous US foreign policy everywhere, including involvement in the Ukraine Maidan uprising, how anyone can be sure of anything is beyond me.

I am not saying "Putin did not do it." Rather I am saying "I don't know".

I do know that Nemtsov could be considered washed out. Russians dropped him and his party in droves when he supported Ukraine in the Ukrainian civil war. I also know his mistress was Ukrainian and Nemtsov flew her to Switzerland to have an abortion.

There are any number of possibilities here, including the strong possibility that making Nemtsov a martyr made him worth more alive than dead to Putin, and more dead than alive to the anti-Putin movement.

Could Nemtsov have been setup by his mistress? The only "no" answer I can come up with is along the lines of "dead women tell no tales". Why would someone leave her as a witness except by accident?

Extremely Inaccurate Reporting

With rush to judgment out of the way, let's turn our focus on some extremely inaccurate headlines.

For example, Yahoo!Finance reported on February 28, Nemtsov Admitted Fears for Life Weeks Before Murder.

The headline, the body of the article, and the actual interview do not match.

From Yahoo!Finance

Russian opposition leader Boris Nemtsov, gunned down on Friday in a contract-style killing, gave an interview this month admitting he had feared for his life over his opposition to President Vladimir Putin.

In an interview with weekly Sobesednik, Nemtsov was asked: "Have you started worrying that Putin could personally kill you in the near future or do it through middle men?"

He replied: "You know... yes. A little.

"But all the same I'm not that scared of him. If I was that afraid, I would hardly have headed an opposition party and would hardly be doing what I'm doing now," he said in the interview published in early February.

In a light-hearted exchange, the Sobesdenik journalist told Nemtsov: "I hope that common sense will prevail after all and Putin won't kill you."

"God willing. I hope so too," Nemtsov replied.

Actual Interview

The actual interview went nothing like the above.

Nemtsov never admitted fear of being killed. Rather he commented his mother (not he) feared for his life.

That link is to the full interview in Russian. Run it through any translator you want. What follows is my edited Yandex translation.

Nemtsov: When I called her regularly, she says, "Son, when will you stop criticizing Putin? He'll kill you" (Nemtsov laughs).

Reporter: Finally, I will ask you, are you afraid of Putin? More cautious?

Nemtsov: Slightly afraid. [See my note below for a more accurate translation]

Reporter: But a little fear, yes?

Nemtsov: "Well listen, I'm kidding. If I was afraid, I would hardly have headed an opposition party and would hardly be doing what I'm doing now."

Not Really Afraid

Note: Reader Jacon Dreizin informs me, that "slightly afraid" better translates as "not really". The context and the reporter's followup question both indicate "not really" is a better translation.

Nowhere was a question asked "Have you started worrying that Putin could personally kill you in the near future or do it through middle men?"

Reader Andrei Chimes In

I also pinged this post off reader Andrei who speaks Russian and graciously offered help with Russian translations. He confirms what Jacob had to say.

Reader Andrei went on ...

Nemtsov says he is "afraid a little bit" or "not really afraid". In Russian both are quite close to each other. But then he follows up with "if I was afraid I would not be leading the opposition" etc.

The actual question from interviewer should have been translated as "And the last question I want to ask you - are you afraid of Putin? Or are you going to be more careful now?" To which Nemtsov replies that if he was afraid he would not be doing what he does.

Nowhere in interview there is a line from the reporter about "let's hope Putin won't kill you" neither Boris reply about god willing. The whole interview is about his relationship with his mom with some small bits about how she does not like Putin.

Hope this helps. Let me know if you need any further elaboration.

Cheers, Andrei

The critical question was made up by someone. So was the answer. So was the exchange about "God willing". Or, if you prefer, the posted interview is a lie.

Which is it?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Trends in Employment: What Age Groups Get the Jobs?

Posted: 06 Mar 2015 11:15 AM PST

One interesting fact in today's jobs report (see Diving Into the Payroll Report: Establishment +295K Jobs; Household +96K Employment, Labor Force -178K) was a drop in teenage unemployment of 1.7 percentage points while overall the unemployment rate fell by only 0.2 percentage points.

The only reason the overall rate fell was a plunge in labor force of 178,000. Household survey employment only rose by 96,000 vs. the establishment survey gain of an alleged +295,000.

The decline in teenage unemployment got me wondering: Where are the jobs, and what age groups got them? Here are a few seasonally adjusted charts from the St. Louis Fed.

Employment 16-19 Month Over Month

Employment 20-24 Month Over Month

Employment 25-54 Month Over Month

Employment 55+ Month Over Month

Age Categories

25-54 is a rather broad category. So is 55+. I would have liked to see finer breakdowns.

Additional data is available on the BLS data site directly, but even there, not all of the seasonally adjusted numbers I wanted were available. However, all of the age groups I wanted to see on a "not seasonally adjusted" basis were available.

Let's take a look at the two sets of tables I created from BLS data.

Not Seasonally Adjusted Employment Growth Year-Over-Year

Age Group	Employment Growth Y/Y NSA	Population Growth Y/Y	Employment Relative to Population Growth
16-19	456,000	-34,000	490,000
20-24	409,000	-26,000	435,000
25-34	866,000	617,000	249,000
35-44	69,000	108,000	-39,000
45-54	464,000	-207,000	671,000
55-59	175,000	279,000	-104,000
60-64	296,000	543,000	-247,000
65+	228,000	1,534,000	-1,306,000

Note the huge outsized job gains in age groups 16-19 and 20-24. On an age-adjusted basis, the job gains are even greater.

Also the demographic shift to age group 25-34 puts the 866,000 job gain in that group in proper perspective. Relative to population growth, age group 35-44 actually lost jobs.

Retirement explains age groups 60-64 and 65+. Retirement (and forced retirement), along with rising disability fraud, also explains the drop in participation rate.

By forced retirement I mean people who want a job but do not have one, so they retire to collect Social Security because they need the income.

Seasonally Adjusted Employment Growth Month-Over-Month

Age Group	Employment Growth M/M SA	Population Growth M/M
16-19	86,000	-6,000
20-24	103,000	-20,000
25-34	108,000	37,000
35-44	-86,000	2,000
45-54	78,000	-55,000
55+	-187,000	-6,000

Perspective on the 96K Household Survey Gain

Of the 96,000 gain in employment this month, 189,000 of it came in the age group 16-24 even though that population group dropped by 26,000!

Please stop and think about that for a second.

Yes, retirement affected the overall results, but even so, age group 35-44 lost 86,000 jobs. Overall it seems reasonably safe to assume more high-paying jobs were lost this month than gained.

Still think this was a good jobs report?

Close scrutiny of both month-over-month and year-over-year data suggests we keep adding low wage jobs while boomers retire en masse.

These job reports are nowhere near as strong as most think.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Diving Into the Payroll Report: Establishment +295K Jobs; Household +96K Employment, Labor Force -178K

Posted: 06 Mar 2015 08:51 AM PST

Initial Reaction

Once again we see the pattern of a strong establishment survey but a poor household survey. The latter varies more widely, and the tendency is for one to catch up to the other, over time. The question, as always, is which way?

Here is one stat that really stands out: The unemployment rate for teenagers 16-19 fell 1.7 percentage points. BLS Jobs Statistics at a Glance

Nonfarm Payroll: +295,000 - Establishment Survey
Employment: +96,000 - Household Survey
Unemployment: -274,000 - Household Survey
Involuntary Part-Time Work: -175,000 - Household Survey
Voluntary Part-Time Work: +15,000 - Household Survey
Baseline Unemployment Rate: -0.2 at 5.5% - Household Survey
U-6 unemployment: -0.3 to 11.0% - Household Survey
Civilian Non-institutional Population: +176,000
Civilian Labor Force: -178,000 - Household Survey
Not in Labor Force: +354,000 - Household Survey
Participation Rate: -0.1 at 62.8 - Household Survey

January 2015 Employment Report

Please consider the Bureau of Labor Statistics (BLS) November 2014 Employment Report.

Total nonfarm payroll employment increased by 295,000 in February, and the unemployment rate edged down to 5.5 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in food services and drinking places, professional and business services, construction, health care, and in transportation and warehousing. Employment in mining was down over the month.

Click on Any Chart in this Report to See a Sharper Image

Unemployment Rate - Seasonally Adjusted

Nonfarm Employment January 2011 - February 2015

Nonfarm Employment Change from Previous Month by Job Type

Hours and Wages

Average weekly hours of all private employees was stationary at 34.6 hours. Average weekly hours of all private service-providing employees was flat at 33.4 hours.

Average hourly earnings of production and non-supervisory private workers was flat at $20.80. Average hourly earnings of production and non-supervisory private service-providing employees was flat at $20.61.

Since November, Average hourly earnings of production and non-supervisory private workers rose $0.03, from $20.77 to $20.80 (about a penny a month).

Since November, average hourly earnings of production and non-supervisory private service-providing employees rose $0.04 from $20.57 to $20.61 (about 2 cents a month).

From this perspective, wages are rising about 1% a year.

For discussion of income distribution, please see What's "Really" Behind Gross Inequalities In Income Distribution?

Birth Death Model

Starting January 2014, I dropped the Birth/Death Model charts from this report. For those who follow the numbers, I retain this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid. Should anything interesting arise in the Birth/Death numbers, I will add the charts back.

Table 15 BLS Alternate Measures of Unemployment

click on chart for sharper image

Table A-15 is where one can find a better approximation of what the unemployment rate really is.

Notice I said "better" approximation not to be confused with "good" approximation.

The official unemployment rate is 5.5%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

U-6 is much higher at 11.0%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.

Some of those dropping out of the labor force retired because they wanted to retire. The rest is disability fraud, forced retirement, discouraged workers, and kids moving back home because they cannot find a job.

For further discussion of a more accurate measure of the unemployment rate, please see Gallup CEO Calls 5.6% Unemployment Rate "The Big Lie": What's a Realistic Unemployment Rate?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

No, No, No Says Draghi to Greece; Spanish Economy Minister Insists 3rd Bailout Talks Underway

Posted: 06 Mar 2015 08:05 AM PST

Spanish Economy Minister Insists 3rd Bailout Talks Underway

Spanish economy minister, Luis de Guindos, has reiterated his position that Third Greece Bailout discussions are in play.

Luis de Guindos put back on the table the possibility that the Troika is preparing a new bailout for Greece. "The four month extension of the aid program will show us the real situation and establish the need for a third rescue," he assured an information forum. "Next week, the Eurogroup meeting will hopefully expose the discussions that have occurred," he added.

Jean-Claude Juncker denied this week that it was negotiating a third bailout for Greece, but it's the second time that the economy minister made statements in this regard. In particular he spoke of a package of between 30 and 50 billion euros of which Spain would guarantee between 13% and 14%. Our country has already contributed 26 billion euros in respect of guarantees and loans for the Greek economy.

Whom to Believe?

Once again this is a question of whom to believe.

I don't know for the simple reason that no one involved merits the benefit of the doubt.

I discussed this issue at length in Greecification of Spanish Politics and the Lies of Spain's Ministers.

The actual amount of Spain's loan to Greece is €6.65 billion. Everything beyond that is a loan guarantee, not current paid out of pocket. The guarantee is real, but it's not spent money ... yet.

See the preceding link for discussion.

No, No, No Says Draghi to Greece

Keep Talking Greece has anther interesting post today: Varoufakis says "We have Plan B" after ECB Draghi's says No,No,No to liquidity.

"We have Plan B" Greek Finance Minister Yanis Varoufakis told private Mega TV on Thursday, just a couple of hours after ECB head Mario Draghi linked ECD funding with Greece's compliance to the bailout and austerity program, righting the conditions for liquidity.

At a press conference today, Mario Draghi distributed money around, but to the Greek, he said three times "No".

NO, ECB will not allow Athens to sell additional T-bills total worth 8 billion euro.

NO, ECB will not buy Greek bonds under its new assets-buying program.

NO, ECB will not accept Greek bonds as collateral.

"The ECB is a rule-based institution. It is not a political institution. It cannot provide monetary financing to governments, either directly or indirectly. We cannot give money to banks to fund governments," Draghi said.

Odd, that he did not add that he had no problem to fund banks and put the burden on taxpayers around Europe, when it comes to fund the oh-so-dear banks.

P.S. No, Varoufakis did not elaborate on the Greek Plan B.

Musical Tribute

I believe I see four distinct no's in the above article, and I have the perfect musical tribute.

Link if video does not play: Ringo Starr - The No-No Song

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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