The January Jobs Are Statistical Artifacts (LIES)

Personal Liberty ^ | 2/7/2012 | Paul Craig Roberts

[IbJensen]

Last Friday, the U.S. Bureau of Labor Statistics reported that in the first month of this year 243,000 jobs were created and the unemployment rate fell to 8.3 percent. This good news is a mirage. It is due to faulty seasonal adjustments and to the BLS birth/death model. In a prolonged downturn, seasonal adjustments and the birth/death model produce nonexistent employment.

The unadjusted data show a rise in the unemployment rate. The birth/death model, which estimates the net effect of jobs lost from business failures and jobs created by new start-ups, was designed for a normal growing economy, not for a prolonged downturn. Statistician John Williams (shadowstats.com) reports that the BLS adds 48,000 new jobs per month to the payroll employment report based on the birth/death model even though the economy has not come out of the deep recession. In other words, over the course of a year, the birth/death model adds about 580,000 jobs to the reported jobs numbers. End-of-year benchmark revisions quietly take the nonexistent jobs out of the totals, but these revisions do not receive headlines and pass largely unnoticed.

The reported January jobs gains are contradicted by other official reports. For example, the January payroll jobs report shows 50,000 new jobs in manufacturing, but according to the recently released fourth quarter gross domestic product, 81 percent of the reported growth consisted of undesired inventory accumulation. Normally, companies produce for sales, not for inventories. Why would manufacturers be hiring people to produce goods for undesired inventories?

Most of the new reported January jobs are in services. The January jobs report has 24,500 new jobs in wholesale and retail trade and 13,100 new jobs in transportation and warehousing. However the data show that inflation-corrected real retail sales are down. Why does it take more people to sell fewer goods?

The other remaining sizable components of the January jobs number are: professional and technical services (30,000), administrative and waste services (36,700), health care and social assistance (29,700), and leisure and hospitality (44,000) of which the largest component is food services and drinking places (32,800).

The leisure, waitresses and bartender employment numbers seem high for January. Perhaps it was an excellent ski month in the United States. However, accommodation (hotels) does not support this conclusion, as accommodation lost 3,900 jobs.

The BLS reports 21,000 new jobs in construction. However, the housing report says that housing starts dropped more than forecast in December, falling 4.1 percent. Why does it take more construction workers to produce fewer houses? Building permits, a proxy for future construction, were little changed.

As the adjusted data produce phantom jobs and employment, the BLS should headline the raw unadjusted data. With so many discouraged workers unable to find jobs, dropping discouraged workers out of the measure of unemployment seriously understates the true magnitude of the unemployment problem. If Americans were aware of the double-digit unemployment rate, would they be as tolerant of Washington’s multitrillion-dollar wars? Would Obama be facing a tougher re-election campaign? Would Republicans be pushing to reduce the Federal budget deficit at the expense of the social safety net?

The phony data serve many interests, but not those of the American people.

[IbJensen]

More lies cooked up by this most evil of administrations and one that seeks the murder of America!

People can’t even count ballots, plus the government doesn’t recognize those who have stopped working or otherwise. Inaccurate numbers equals agenda fulfilled 2nd term for obummer.

[scooby321]

The economy where I live has gotten worse on the last year. Housing, Jobs and discretionary spending

[Ken522]

Where abouts do you live, Scooby?

[Travis McGee]

The new USSA is starting to remind me of the USSR.

Remember?

“Grain Harvest Smashes Record!” during famines, etc.

[caver]

He had a good article until he got to this whopper, “Washington’s multitrillion-dollar wars”.

[Texas Fossil]

Thanks for the link.

I have been aware of shadowstats for some time, but this is a more concise explanation than I had seen of the Business Birth/Death model distortion.

[Vinnie]

BLS Jobs Model= Global Warming Model

Same program, just change the names. :)

[ScottinVA]

The phony data serve many interests, but not those of the American people.

To Obama and his backers, the most important interest served by the data is his reelection. Nothing else matters.

[finnsheep]

Proposing to keep kids in school until they are 18 will also briefly help the unemployment numbers, while keeping our youngsters warehoused and away from real life experience for an extra two years.

[Iron Munro]

The January Jobs Are Statistical Artifacts

This headline needs some correcting:

The January Jobs Are Statistical Artifices

[The Sons of Liberty]

If you (and the MSM) repeat a LIE long enough, it becomes the truth.

Those that are unemployed and are sincerely seeking work now feel even more discouraged, because the 0bama propaganda machine says there are [imaginary] jobs available, yet they can't be found.

[Senator_Blutarski]

Does anyone out there have any insight into these two related issues?:

(1) Do unemployed workers drop out of the "seeking employment" category when they exhaust their 99 weeks of unemployment benefits?

(2) I read somewhere that the drop in the unemployment rate was mostly fueled by a shrinking number of people seeking work. Why would a large number of people suddenly stop looking for work?

A third (and difficult) question is why is the media so lacking in curiosity about the data underlying the employment statistics?

[khelus]

Per the BLS report:"Total nonfarm payroll employment rose by 243,000 in January."

If you look at the raw numbers in Table B-1, the number of jobs declined by 2,689,000.

After -2,689,000 is processed by two statistical tools, the Birth and Death model, and seasonal adjustment, -2,689,000 changed into +243,000!

[khelus]

1. The number of those getting unemployment is not used in calculating the monthly unemployment rate. The monthly unemployment rate is based upon a telephone survey.

The number collecting unemployment is used once a year by the BLS for the annual ‘reset’.

2. In a major revamp in 1994, the BLS began moving long term ‘discouraged’ workers out of the workforce. This is what fueled the recent drop. 1.5 million (1.2 million after seasonal adjustment) were moved out of the civilian labor force. I haven’t seen anything describing how the BLS determines the number of long term discouraged workers.

[Bon mots]

The math:

Total US Labor Force: 153.4 million (Source: CIA FACTBOOK)

Workers in Labor force when Obama elected:
153.4 x 66% = 101.244 million
153.4 million labor force X 66% Labor Force Participation rate.

Workers in Labor force as of Feb. 2012:
153.4 x 63.7% = 97.7158 million
153.4 million labor force X 63.7% Labor Force Participation rate.


TOTAL JOBS LOST 101.244 - 97.7158 = 3.5282 million

Uploaded with ImageShack.us

Series Id:  LNS11300000
Seasonally Adjusted
Series title:  (Seas) Labor Force Participation Rate
Labor force status:  Civilian labor force participation rate
Type of data:  Percent or rate
Age:  16 years and over

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Annual
2002	66.5	66.8	66.6	66.7	66.7	66.6	66.5	66.6	66.7	66.6	66.4	66.3
2003	66.4	66.4	66.3	66.4	66.4	66.5	66.2	66.1	66.1	66.1	66.1	65.9
2004	66.1	66.0	66.0	65.9	66.0	66.1	66.1	66.0	65.8	65.9	66.0	65.9
2005	65.8	65.9	65.9	66.1	66.1	66.1	66.1	66.2	66.1	66.1	66.0	66.0
2006	66.0	66.1	66.2	66.1	66.1	66.2	66.1	66.2	66.1	66.2	66.3	66.4
2007	66.4	66.3	66.2	65.9	66.0	66.0	66.0	65.8	66.0	65.8	66.0	66.0
2008	66.2	66.0	66.1	65.9	66.1	66.1	66.1	66.1	65.9	66.0	65.8	65.8
2009	65.7	65.8	65.6	65.6	65.7	65.7	65.5	65.4	65.1	65.0	65.0	64.6
2010	64.8	64.9	64.9	65.1	64.9	64.6	64.6	64.7	64.6	64.4	64.5	64.3
2011	64.2	64.2	64.2	64.2	64.2	64.1	64.0	64.1	64.1	64.1	64.0	64.0
2012	63.7

---

Now this on top of the fact that the BLS sees the labor force rising by over a million people per year each year until 2020...

Year	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020
Labor Force: (millions)	155,159	156,290	157,393	158,486	159,530	160,572	161,530	162,471	163,435	164,360

---

Source: Bureau of Labor Statistics

[Vaduz]

Inaccurate numbers equals agenda fulfilled.
It’s just three card Monte (Obama) pimping for another term,boy he he going to be disappointed.

[TheOldLady]

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