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Thread: weekend commentary - jobs report actually much worse than it first appears

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    Banned Melonie's Avatar
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    Default weekend commentary - jobs report actually much worse than it first appears

    ... again Mish deserves deep gratitute for picking apart the official numbers ...



    (snip)"February Jobs Report

    With the above backdrop in mind, let's take a look at the February Jobs Report.

    Nonfarm payroll employment edged down in February (-63,000), and the unemployment rate was essentially unchanged at 4.8 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Employment fell in manufacturing, construction, and retail trade. Job growth continued in health care and in food services. Average hourly earnings rose by 5 cents, or 0.3 percent, over the month.

    This notion of jobs "edging down" is preposterous. It takes about 150,000 jobs a month just to keep up with the birth rate and immigration. The loss of 63,000 jobs was an unmitigated disaster that cannot be hidden by obvious spin aimed to soften the blow.

    Details Worse Than Headline Numbers

    Construction Jobs Fell 39,000
    Manufacturing Jobs Fell 52,000
    Goods Producing Jobs Fell 89,000
    Private Sector Jobs Fell 101,000
    Government Jobs Rose 38,000
    Construction jobs and Manufacturing jobs are subsets of goods producing jobs. Those jobs tend to be higher paying jobs. Leisure and hospitality added 21,000 jobs and those tend to be lower paying jobs. Worse yet, the government added 38,000 useless jobs. Without those government jobs, the headline would have read 101,000 jobs lost. Arguably the headline numbers should be about private sector jobs in any case."(snip)


    So there you have it. Last month 101,000 jobs were lost that derived their paychecks from 'adding value' or 'producing' something. But 38,000 new jobs were added by various gov't agencies, all of which derive their paychecks from the taxes leveed on remaining workers who 'add value' or 'produce' something - of which there are now 101,000 fewer taxpayers.

    And before you say it, yes gov't employees pay taxes. But essentially this is only 'recyclking' since the money they pay in taxes goes right back to the same till from which their paycheck was drawn in the first place. So the 38,000 new gov't jobs really only add to the problem.

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    Veteran Member StuartL's Avatar
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    Default Re: weekend commentary - jobs report actually much worse than it first appears

    Interesting and just a little frightening at this stage of the economic cycle. Thanks for posting it.

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    Default Re: weekend commentary - jobs report actually much worse than it first appears

    ^^^ it's more than just a little frightening on several levels, actually. Not only has the US federal gov't been adding jobs, but so have state and local gov'ts. This of course serves to reduce the official unemployment statistics, but it also adds to the eventual federal, state and local tax burden. To put this in perspective, some states like California and New York are up to the point where public sector employment represents one out of every 5 or 6 jobs in the state !

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    Default Re: weekend commentary - jobs report actually much worse than it first appears

    Quote Originally Posted by Melonie View Post
    To put this in perspective, some states like California and New York are up to the point where public sector employment represents one out of every 5 or 6 jobs in the state !
    1 out ? citizens of these states are in prison.

    (Look up your state of interest here )

    1 out of ? citizens of these states are on public assistance.

    (No idea where to find this data.)

    A more interesting number might be n out 10 have a non-government job. What's n?

    (How to handle those on government subsidies and tax deferments?)

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    Default Re: weekend commentary - jobs report actually much worse than it first appears

    ^^^ all of which are also skewed by the state's definition of citizen versus resident (legal or illegal), by the state's definition of job (documented vs under the table) etc.

    However, none of that affects the fact that public sector employment is being stealthily but steadily increased a la the 1930's WPA.

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    Default Re: weekend commentary - jobs report actually much worse than it first appears

    Quote Originally Posted by Melonie View Post

    So there you have it. Last month 101,000 jobs were lost that derived their paychecks from 'adding value' or 'producing' something. But 38,000 new jobs were added by various gov't agencies, all of which derive their paychecks from the taxes leveed on remaining workers who 'add value' or 'produce' something - of which there are now 101,000 fewer taxpayers.
    Do you know what percentage of these jobs added by gov't agencies were military as opposed to civilian?

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