Tuesday, June 5, 2012 >>
There are lies, damn lies and government statistics. But when it comes to the U.S. government and employment data, it gets worse. The Bureau of Labor Statistics (BLS) simply makes stuff up, adds it to questionable statistics and still comes up with awful numbers!
The latest example: the June 1 Employment Report from the BLS. It reflected an increase of 69,000 jobs in the U.S. economy.
That is an awful number. Our economy needs at least 120,000 new jobs per month, just to absorb new workers (those graduating high school, college, etc.).
So far, this is simply a reflection of reality. The U.S. economy is not recovering, the job market remains weak, and we can expect continued downward pressure on wages and standards of living.
I’ll say it again: 69,000 is a dismal number. But in true government fashion, it gets worse…
If you look behind the report to see how the BLS estimated those 69,000 new jobs, you find it counted a combined loss of 137,000 jobs when it surveyed businesses and government agencies (city, state, county and federal). A reasonable person would interpret this to mean the economy actually LOST 137,000 jobs in the month of May. Not government.
This is where it gets idiotic.
The BLS adds to these survey responses its own estimate of jobs created or lost at businesses not surveyed. It calls this estimate the birth/death adjustment, capturing the jobs created or lost when businesses are “born” or “die.” This might be a useful exercise if the results seemed to have any bearing on reality. They don’t.
I have talked about the birth/death model used by the BLS before, but the latest results are so far removed from our current economic situation it’s laughable. For the month of May, the BLS “guessed” that new businesses created 206,000 jobs.
Yes, you read that correctly: the BLS simply imagined 206,000 new jobs into existence. Then it added this fictitious number to the actual survey results that show 137,000 jobs were lost… and voila, 69,000 new jobs were created last month.
This is offensive for several reasons.
First, why make this up at all? The BLS is so bad at it, and so badly skews the real numbers, that it makes our monthly unemployment reports meaningless.
Second, if you’re going to make something up, make up a number that looks fabulous. Every 5-year-old knows that if you are going to lie, then lie big! Why not 300,000 guessed-at jobs? Or 400,000? Let’s go with 7,000,000 and put EVERYONE back to work… on paper at least.
Then there’s that little thing called truth.
The Census Bureau just released its estimate of the number of new businesses being started. It’s the lowest it’s been since 1983.
Additionally, the Census Bureau estimates the number of new employees at each new establishment. That number is at its lowest level since the late 1970s.
Obviously the Census Bureau and the BLS don’t spend much time talking to each other.
Unfortunately, we know the actual situation all too well. It doesn’t matter what the BLS or the Census Bureau tells us. Finding jobs, much less well-paying jobs, is very difficult. We don’t need a government agency to tell us that.
Ahead of the Curve with Adam O’Dell
This Will Be a Long, Slow Road
I wonder… when jobs are lost, are they ever found?
The chart below leads us to the answer: “eventually.”