Surprise! Jobs report goosed by government. Full unemployment 15.9 percent

Townhall Finance ^ | May 6, 2011 | John Ransom

[Kaslin]

"Employers added more than 200,000 jobs in April for the third straight month, the biggest hiring spree in five years," reports the official news oganization for the Obama Adminstration, the Associated Press. "But the unemployment rate ticked up to 9 percent."

"The Labor Department reported Friday that the economy added 244,000 jobs last month. Private employers shrugged off high gas prices and created 268,000 jobs- the most since February 2006."

Here's the problem with these numbers:

The BLS estimates birth and death of private companies and consequent jobs created by them. These numbers have no basis in fact. They are just numbers pulled out of the air.

As IBT notes  "For those of you keeping track at home, the birth death adjustment was 175K, a quite massive figure."

Our friend Mike Shedlock says  "In recent years Birth/Death methodology has been so screwed up and there have been so many revisions that it has been painful to watch."  

As the two charts below show, the BLS over-estimated these jobs in 2010. The first chart is the orginal estimate. 



Birth Death Model Revisions 2010 (as reported February)


Last May, the BLS reported a birth/death number of 215k jobs. Later that was revised to 192k. That's a big discrepancy.

Having said that I am told that's it not quite correct to just subtract out the birth/death jobs.

Instead there are other indicators that are relevant here and they are not good.

The biggest one is unemployment. Some are saying that the uptick to 9 precent is good because it implies more people are looking for work. You have to be looking for work to be considered unemployed.

But as IBT points out the numbers participating in the job market have not risen.

"The labor force participation rate remained stuck at 64.2%, hence the increase in the unemployment rate to 9% from 8.8% is interesting.  Usually you'd expect in recovery for more people to flood back into the job market seeking work, which is why the unemployment rate rising would not necessarily be a bad thing.  However that was not the case in April.  A more typical 66-67% labor force participation rate would add a few % to the unemployment rate."

Shedlock concludes:

"The official unemployment rate is 9.9%. However, if you start counting all the people that 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 ....much higher at 15.9 percent."

[Buckeye McFrog]

at this point the American public has ZERO confidence in any economic numbers coming out of this government

[hflynn]

244,000 - 62,000 Big Macs - 175,000 Death Adjustments = 7,000 April Jobs

[DarthVader]

So much for Odryrotula’s good news on the jobs front.

[RC one]

ah yes, the infamous birth death adjustment whereby the government just assumes that jobs were created by small businesses based on the "business cycle". Didn't those 60,000+ McDonalds jobs get included in this BS figure too? Wow, I'm so much more optimistic now.

[Carley]

This entire administration is painful to watch.

We are becoming experts at enduring endless lies, misrepresentations, and exploitations that defy any sense of decency.

[AlexW]

“This entire administration is painful to watch.
We are becoming experts at enduring endless lies, misrepresentations, and exploitations that defy any sense of decency.”
_____________________________________

Yes, we can see the outright lies and distortions, but
40+ percent of the American public has been dumbed down to moron level, so they lap up the Kool Aid.

EVERYTHING out of these goons in the administration is
a damn lie, and gladly parroted by the Marxist Pravda.

God save America...please.

[headstamp 2]

AP = Administration Press

[EGPWS]

Why don't they just announce that 1,000,000 jobs have been created?

It would look better that way!

[Graneros]

“We are becoming experts at enduring endless lies, misrepresentations, and exploitations that defy any sense of decency.”

Yes so true. But at least we FReepers, unlike the majority of Americans, see through their BS and try and do our part to combat it.

[wastedyears]

Sadly I’m part of that statistic.

[jpsb]

I read the MacJobs will be in the next reporting period. maybe there is a tiny bit of hiring going on? Hope so, but with 14 trillion in debt I see no hope for this generation. Maybe we can inflate or way out of the mess like post WW1 Germany did.

[cableguymn]

After 6 months of hunting my wife got a McJob.. well. it’s a evil non-union retailer job. She got 3 offers from 3 retail box stores..

Sam walton offered her the most and the best, most flexiable hours a women with 2 kids and type 1 could ask for :)

I gave up looking for a job a year ago and bought a struggling fish shop. It’s getting better and turns a profit (just enough so far) so things ARE looking up for us. but my customers have much less disposiable income. A few years ago a shop like mine could sell 2-300 dollar corals 3 or 4 times a week.

Now, anything over 50 bucks just sits. Good thing I can cut the 2-300 dollar ones up in to 50 dollar chunks.

[jpsb]

I hear ya, I turned 60 two years ago and got the ax. Well savings carried me to 62 and now I'm getting SS. SS pays the bills on the house (thank G*d the house is paid for) I also bought a couple of John Deere garden tractors, JD318's one mower and one with a front end loader I manage to make a few $$$ with them. Now if all the illegals would leave I could good very nice mowing lawns and doing light dirt work. Oh I also own a little east Texas beer joint but that just keeps 4 people employed it never makes money and often loses money :(

Good luck to you my friend, remember guns and ammo :)

[LaineyDee]

I have to agree that unemployment has to be above 15.9%. I was out of work for over 4 months but didn’t qualify for unemployment... and I didn’t get “counted” in those numbers. There are tons of people out there in the same position...

[cableguymn]

Like all the housing contractors that are out of work.. If your a contractor, your NEVER counted in the unemployment number.

[LaineyDee]

You’re right... but count ALL contractors in that. I was a contractor as well...but in nursing...not housing.

[cableguymn]

Soapbox, Ballot box, Ammo box... I think we are half way there ;)

I got 23 years to 60. SS likely won’t be there for me. our savings are about gone. We did make a few changes 2 years ago that helped us stay above water. We skipped the 1500 a month for 30 years house and bought a mobile home. We owe 4500 on it and will own it out right at years end. I bought the store with out the small/expensive space on a 2000 car per day road and moved it to a older but on a 75,000 car per day road and was able to keep the rent at just about the same amount.

I also expanded BIG time. 300 to 1300 gallons. More selection, less likely people leave empty handed. I am always on the hunt for vendors with good product and good prices. I have NO problem playing them aginst each other, I expanded in to on site aquarium maintenance and went after industries that seem to weather well in bad times (doctors, hospitals, schools) I have enough accounts now that I don’t even have to unlock the door to the shop to break even :)

I bought the shop last year, I have worn out 3 cheap cars/trucks pounding the pavement in search of business. Its rare that I am home after 8 am or before 12am, it sucks but the kids eat, the lights are on and I am positioned to jump hard once things pick back up in the economy.

Hang in there, do good work at a fair price and you’ll keep the mowers busy. I’m not the cheapest in my area up here. but I am one of the best! Sometimes it takes a while for a customer to realize that.

[cableguymn]

Thats what I meant. Sorry, it was not very clear.

[tbw2]

Make some of them triangular to fit in the corner or fit around the air pump, calling it designer coral.