Tuesday, May 10, 2011

Oh, And About Those 244,000 New Jobs In April....

....it appears as if most of them were made up.  By the government.

John Crudele, a sort of "pop economist" writing at the New York Post, has been for some time calling out the statistical anomalies of the official employment/unemployment numbers the government has been producing, often predicting months out the numbers so often labeled as "unexpected" or "conflicting".  Here he talks about the BS numbers we've gotten for the month of April:

The Labor Department reported that 244,000 new non-farm jobs were created in April. Wall Street expected only about 180,000 -- and the difference between those two numbers is worth billions to investors.

To get its job count up to 244,000, the Labor Department added 175,000 jobs that it thinks and hopes -- but can't prove -- actually exist.

These 175,000 jobs are what Uncle Sam believes are being created by newly-formed companies. This is called the Birth/Death Model by Labor's Bureau of Labor Statistics for those of you who'd like to look it up on www.bls.gov.

Since economic growth in 2011 has clearly slowed (even the Commerce Department's gross domestic product figures, as well as other employment data, show this) Labor's guess on the number of new companies being created is a case of wishful thinking and faulty computer programming.

And that, folks, is how you get 244,000 additional jobs while seeing unemployment spike to 9% without additional job seekers entering the market.  Mystery solved.  Which means that it is highly likely that only 70,000 jobs were created in April, of which 62,000 were provided by...McDonald's.

We'll see the economy continue to "grow" according to Crudele, via numerical gimmicks and trickery:

And the optimism -- and the resulting problems -- will only grow with the May and June employment numbers.

That's because Labor added 191,000 and 131,000, respectively, in May and June of 2010 for the jobs it hopes, but can't prove, are being created by newly formed companies. At the end of each of those years the government needed to issue corrections because most of jobs added under the Birth/Death Model proved illusory.

This year's guesstimates have been running higher than 2010's, so the job count that will be reported on June 3 and July 8 (for May and June, respectively) are going to be strong.

That's a guarantee.

The "resulting problems" Crudele speaks of include the Fed tightening the money supply & banks raising lending rates on the illusion of an economic upswing, while job hunters flood back into the market on false hope, which could ironically give the unemployment numbers a spike they haven't seen since 2009.

Crudele's own paper sees the conflict between the numbers and the reality but can't put a finger on it:

At first glance, New York's job numbers look promising -- with an unemployment rate at 8 percent, down from 9.5 percent only a year ago.

New York reported that 900 jobs were created over the last year for its residents, according to state Labor Department records.
 But there are other numbers that tell a more troubling tale, like the roughly 80,000 people who have left the workforce over the past two years.
 New Yorkers are dropping out of the job market -- and joining the government welfare rolls.

Take the Feds' food stamp program, where nearly 3 million New Yorkers are currently enrolled. According to the latest figures from the United States Department of Agriculture, more than 263,000 New Yorkers applied in February for the Supplemental Nutrition Assistance Program (SNAP) or food stamps.

Nationally, the US Labor Department reports a 1.5 million decline in the unemployment levels over the last year, but the USDA reports 4.6 million Americans have signed up for food stamps over the same period.

The legacy of Barack Obama, I suppose: False economic reports (trumpeted by a compliant media refusing to look into the numbers) leading to a double-dip recession, forcing millions of Americans onto food stamps despite a "positive economic outlook".  And as opposed to "green jobs" building windmill or trains to nowhere, Americans line up by the millions for jobs flipping burgers.

Well, we were promised change, and we got it.  Got it but good...

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