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Thread: weekend commentary - the BLS is 'at it again' re cooked unemployment stats

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    Default weekend commentary - the BLS is 'at it again' re cooked unemployment stats

    from

    (snip)"WASHINGTON (AP) -- The unemployment rate is sinking at the fastest pace in half a century because a surprisingly large number of people say they're finding work.

    The decline conflicts with a survey of businesses that showed weak job growth last month. But that survey doesn't count the self-employed and likely undercounts the nation's smallest businesses. Also, harsh weather disrupted business payrolls in January.

    The unemployment rate dropped sharply last month to 9 percent, based on a government survey that found that more than a half-million people found work. A separate Labor Department survey of company payrolls showed 36,000 net jobs created -- barely a quarter of the number needed to keep pace with population growth.

    The government's survey of households, which is used to calculate the unemployment rate, measures the self-employed, farm workers and household employees. Many economists also say the household survey includes more people who work at small companies.

    "What we're finding is that there are a lot of folks that are saying that they are starting new businesses or they are self-employed," said Labor Secretary Hilda Solis. "That doesn't always get reflected in the payrolls survey."

    The number of people who called themselves self-employed rose by 165,000 to 9.7 million in January, the report said. That's the highest total since last May.

    "It is clear that the drop in unemployment reflected more jobs being added, not a drop in the labor force," said Nigel Gault, chief U.S. economist at IHS Global Insight.

    Harsh snowstorms last month also affected the payroll survey. They cut into construction employment, which fell by 32,000, the most since May. Transportation and warehousing was also likely affected and fell by 38,000 -- the most in a year.

    "The thumbprints of the weather were all over this report," said Neil Dutta, an economist at Bank of America Merrill Lynch. Hiring was suppressed last month and will likely rebound in February, he said. "We know the job market is recovering."

    In another bright spot, manufacturing added 49,000 jobs, the most since August 1998. And retailers added 28,000 jobs, the largest number in a year.

    Treasury yields rose after the report came out, a sign that traders think the job market is improving.

    The unemployment rate has fallen by eight-tenths of a percentage point in the past two months. That's the steepest two-month drop in nearly 53 years.

    But part of that drop has occurred as many of those out of work gave up on their job searches. When unemployed people stop looking for jobs, the government no longer counts them as unemployed.

    The number of people who have given up looking rose to 2.8 million last month, from 2.6 million in December. About one million of those workers said they were discouraged. The others stopped looking because they returned to school or for other reasons.

    And the participation rate, which is the percentage of the working-age population working or looking for work, fell to a 26-year low of 64.2 percent.


    The number of people unemployed fell by more than 600,000 in January to 13.9 million. That's still about double the total that were out of work before the recession began in December 2007.

    The January jobs report also includes the government's annual revisions to the employment data, which showed that fewer jobs were created in 2010 than previously thought. All told, about 950,000 net new jobs were added last year, down from a previous estimate of 1.1 million. The economy lost about 8 million jobs in 2008 and 2009.

    In the past three months, the economy generated an average of 83,000 net jobs per month. That's not enough to keep up with population growth.

    The weakness in the government payroll survey was widespread. Restaurants and hotels cut 2,200 jobs. Governments shed 14,000 positions. And temporary help agencies eliminated 11,000 jobs. Financial services lost 10,000 positions.

    Education and health care services, one of the few steady job generators through the downturn, added 13,000 jobs, the fewest in almost two years. Financial services lost 10,000 jobs."(snip)


    Last edited by Melonie; 02-04-2011 at 12:38 PM.

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    Default Re: weekend commentary - the BLS is 'at it again' re cooked unemployment stats

    gallup follows up with independent survey results showing a 9.9% unemployment rate ...



    Of course the Gallup blurb points out one mechanism by which the BLS can attempt to claim a falling unemployment rate despite only 36,000 jobs being added ... 'seasonal adjustment'.


    Arguably, the 'spin' being applied to the BLS report is so outrageous that CNBC's Rick Santelli is calling out the 'spinmeisters'



    (snip)"Jobs are heading up and down at the same time. The Bureau of Labor Statistics announced the morning of Feb. 4 that only 36,000 jobs were added in the month of January, but the unemployment rate dropped from 9.4 percent to 9.0 percent.

    The mainstream news media will likely latch on to the dropping unemployment rate, despite job gains that were less than one-fourth of the consensus estimate of 148,000 jobs added. One of the CNBC panelists noted that the increase was "way below consensus."

    CNBC's Rick Santelli even lashed out at some of the CNBC "Squawk Box" panel that were discussing the latest jobs report.

    "[W]e have overwhelming evidence the jobs market is disappointing, and all of you are trying to look for that one half of spaghetti in a 50 lb. spaghetti bowl. This is not great data," Santelli claimed "(snip)

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    Default Re: weekend commentary - the BLS is 'at it again' re cooked unemployment stats

    and if the most recent BLS 'creative writing' wasn't bad enough ...

    (snip)Courtesy of today's full year revision announced by the BLS, and a granular sort by John Poehling, we have discovered that while revisions added a whopping 55k jobs in the years 2006-2008, NFPs have now been revised to remove 538k jobs in the 2009-2010 period. In other words, based on data revisions, under President Obama, America has suddenly created over half a million jobs less (even if all of them are part time) simply due to statistical adjustments. We won't even go into analyzing just how much worse the S&P would be trading if all those monthly "upside" NFP reports had reflected true and not completely fudged numbers. At an average 22.4K downward monthly revision for every single monthly NFP report in the past two years., we are 100% confident that not even Iosif Shalom Bernanke would be able to offset the market plunge that would ensue each and every of the past 24 months... if fundamentals were ever to be remotely meaningful again, of course. (snip)

    from


    hmmm ... if there were only 36,000 new jobs created last month according to the 'non-seasonally adjusted' numbers, and if the BLS has been averaging a 22,400 jobs per month upside 'error' once facts catch up with estimates, this is not encouraging news of a supposed recovery !

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    Default Re: weekend commentary - the BLS is 'at it again' re cooked unemployment stats

    No it is not encouraging news. This is a record setting weak recovery. The last time we had a recession this severe was when Reagan was President. Unemployment went from a high of 10.8 % in 1982 to a low of 4.4%. Economic growth under Reagan AVERAGED over 4% per year and in 1983 and 1984 the economy hummed along with growth rates well over 7 %.

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    Default Re: weekend commentary - the BLS is 'at it again' re cooked unemployment stats

    ^^^ Reagan's policies aside, there is at least ONE issue which is undisputable. In 1982, an official 10.8% gov't 'unemployment' statistic really meant that 10.8% of all Americans who were seeking work had not been able to find a job. These days an official 9.0% 'U1 unemployment rate', with seasonal adjustments plus 'discouraged workers' plus other methodology 'tweaks' means that a higher percentage of Americans are actually unenployed than in 1982 !!!

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    Default Re: weekend commentary - the BLS is 'at it again' re cooked unemployment stats

    Quote Originally Posted by Melonie View Post
    ^^^ Reagan's policies aside, there is at least ONE issue which is undisputable. In 1982, an official 10.8% gov't 'unemployment' statistic really meant that 10.8% of all Americans who were seeking work had not been able to find a job. These days an official 9.0% 'U1 unemployment rate', with seasonal adjustments plus 'discouraged workers' plus other methodology 'tweaks' means that a higher percentage of Americans are actually unenployed than in 1982 !!!
    Sad but true. I have to confess that initially I was very confused by the latest numbers. The unemployment rate went down and according to the Household Survey, there were 600,000 new jobs. Good News ! ; until you look deeper. 36,000 new jobs according to the Payroll Survey is just a spit in the ocean. We need a minimum of 250,000 new jobs per month just to keep pace with population growth and an increased labor force.
    As you point out, the number of DISCOURAGED workers rose 200,000 in just one month.

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