"But where my current confusion comes from is that we have two reports: One saying 114K new jobs, and then another (household survey) saying +800K."
I think the 800k number is the
actual raw number, based upon corporate payrolls they sample.
But to compare apples to oranges months (most job hiring, I believe, takes place in those spring and summer months when high school and colleges graduate and those graduates enter workforce with real jobs). Other months (July?) I think there is actually very little actual hiring.
So BLS take a monthly snapshot and annualizes the number (
SAAR), and does all sorts of seasonal adjustments so you can validly compare say December to July.
Don't understand it in depth, but I think you have to view those numbers more as a rate of acceleration or deceleration basis, on a relative basis, compared to other months.
I think BLS samples are incomplete, so there is lots of guesswork, inference, and fill in the blanks to come up with their number (revisions after the fact presumably reflect more actual data coming into them).
All in all, I think it is a good number for Main Street America, but for many, it is still not enough (absolute number of jobs created) or fast enough (those that lost their jobs for whatever reason from January 1 2008 peak) being reabsorbed and getting good, reasonably paying full time job.
You have to remember that whole world is still undergoing
debt deleveraging from credible bubble years, so people and businesses and maybe governments (er, maybe not them, seems like they all will eventually pay off debt via gentleman's default of higher inflation and devalued currency), are paying down debt, rather than spending more.
Plus
uncertainty about taxes, healthcare law and new fees, and most importantly, fiscal cliff (is gridlock in lameduck Congress going to produce a temporary shallow recession early next year?) are things holding back businesses (here, from what Bob Johnson said, I think it is more large corporations, rather than small and medium size businesses who are already hiring because their businesses are improving) holding back expansion plans if otherwise makes sense.
They want to know what health care law fees are and what corporate and individual income tax rates are going to be. Then they can decide whether or not it makes sense to expand business or hire. certainty and
predictability, those are the key sentiments I hear over and over again when CEO types, who are talking their own businesses, and not politics or idealogy, say.
China (
http://humblestudentofthemarkets.blogspot.com/2012/09/watch-for-storm-clouds-on-horizon.html) change of leadership is supposed to finally take place in November I think, plus we will hopefully have more (questionable) Chinese economic data as to whether their economy has come in for a bumpy landing (7% nominal gdp growth, or 5 - 6% gdp growth), or whether economy has truly crashed and is in actual recession.
My only somewhat informed take on
Europe is that they are choosing Japanification (
http://brontecapital.blogspot.com/2008/07/deflation-and-bank-bailouts-in-japan.html and
http://www.testosteronepit.com/home/2011/9/21/how-long-can-japan-play-the-endgame.html) as a way to deal with mountains of debt they've developed over the years. So maybe won't contribute much to global growth, but if this tail risk (European Lehman moment or
Credit Ansalt type cascade of bank failures http://www.businessweek.com/magazine/content/11_18/b4226012481756.htm) can be taken off table, then the
Asian Currency Crisis / Russian default /Long-Term Capital Management scenario* from late 1990s may be able to develop again (then, I believe, 1/3 of global gdp went off line, but U. S. stock market was able to rally hard into year 2000, and economy didn't do bad during those years, either):
* "
Staring Into the Abyss
It was late in September of 1998. I was flying from New York to Bermuda to speak at a hedge fund conference, and found myself upgraded at the last minute, back in the day when I did not fly that much, so I was feeling rather happy. As the door closed, a patrician-looking gentleman stepped in and came and sat next to me, immediately picking up a file and burrowing into it. I had a book and the
Wall Street Journal, so I was content to read.
As soon as we took off, he asked for a scotch. He proceeded, over the next hour, to wage a very aggressive war on the diminishing cache of scotch bottles stored on board. (No, it was not Art Cashin. He doesn't fly.) It was an arduous campaign, but he was fully committed to winning.
He glanced over to my
Journal and noted some headline about the crisis that had occurred the previous week. I had been following the extreme market volatility with interest, but this was in the first decade of the internet, so most of what you came by you still read in print or heard on the phone.
"They don't really know how close we came," he shuddered, his eyes showing the first signs of emotion – and fear – I had seen from him. That piqued my interest, and I engaged him, though without touching his precious hoard of scotch. I settled for a nice chardonnay.
It turned out he was the second-ranking executive at one of the three largest banks in the country. He had been at the table in the NY Fed boardroom when 14 banks were forced to put in $3.625 billion to keep Long Term Capital from collapsing, with only Bear Stearns declining (one of the reasons they had no friends ten years later). The NY Fed president had essentially called all the heads of the banks, told them to be in the room, not to send proxies, and to bring their checkbooks. There was subsequently a lot of criticism of the Fed, but they did what a central bank is supposed to do in times like that: they made the children play nice in the sandbox. They were the only entity that could force the various monster-ego players to even sit in the same room with each other.
"No one will ever really know," he said again. But of course, soon everyone did, as Roger Lowenstein wrote the must-read real-life thriller
When Genius Failed.
"We walked to the edge of the abyss, and we looked over." He proceeded to regale me with the stories of the negotiations, as the immensity of what would happen if they allowed the collapse dawned on the group one by one.
They all had exposure to LTCM but did not realize the extent of it until it was too late. Looking back, it might have looked something like the credit crisis of 2008 if they had not acted, except it would have happened much faster.
I can tell you that no one in that room wanted to write a $300-million check. It was not good for their careers. Interestingly, after two years the fund was liquidated and the banks got back their capital plus a small profit.
Now, the bankers and leaders of Europe are getting ready to walk to the edge of the Abyss. It will be a long way down, and look like the 7th level of Dante's Inferno."
http://seekingalpha.com/article/321072-europe-staring-into-the-abyss
Bob Johnson at end of video clip I provided above says employers cut back to much because of all the chatter on tv and now realize they let people go they needed and are scrambling to hire them back.
Lifting of remaining uncertainties hopefully portends the acceleration in job market both commentators in that video clip anticipate in 1Q 2013 (
http://www.morningstar.com/Cover/videoCenter.aspx?id=569632).