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.

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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.


Harry

 

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.”

This chart tracks job losses…

 

New Update on the Markets!

Harry Dent shares details on his latest prediction for the markets and the new dangers that lie just ahead for Americans:   “This is no longer a question of ‘if,’ but simply a… Read More>>
Harry Dent
Harry S. Dent Jr. studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of his chosen profession that he turned his back on it. Instead, he threw himself into the burgeoning new science of finance where identifying and studying demographic, technological, consumer and many, many other trends empowered him to forecast economic changes. Since then, he’s spoken to executives, financial advisors and investors around the world. He’s appeared on “Good Morning America,” PBS, CNBC and CNN/Fox News. He’s been featured in Barron’s, Investor’s Business Daily, Entrepreneur, Fortune, Success, U.S. News and World Report, Business Week, The Wall Street Journal, American Demographics and Omni. He is a regular guest on Fox Business’s “America’s Nightly Scorecard.” In his latest book, Zero Hour: Turn the Greatest Political and Financial Upheaval in Modern History to Your Advantage, Harry Dent reveals why the greatest social, economic, and political upheaval since the American Revolution is on our doorstep. Discover how its combined effects could cause stocks to crash as much as 80% beginning just weeks from now…crippling your wealth now and for the rest of your life. Harry arms you with the tools you need to financially prepare and survive as the world we know is turned upside down! Today, he uses the research he developed from years of hands-on business experience to offer readers a positive, easy-to-understand view of the economic future by heading up Dent Research, in his flagship newsletter, Boom & Bust.