‘Seasonally Adjusted’ Hijinks? The Questionable June Jobs Report
On Friday, News Editor Ed Carson at Investor’s Business Daily listed ten reasons why the job market is worse than that morning’s Employment Situation Summary from the government’s Bureau of Labor Statistics (BLS) indicated. It’s a good list, and includes several items which have failed to gain sufficient notice. I’ll get to those later.
I have a really important eleventh reason to add which everyone seems to have missed: the report’s seasonally adjusted results made it look as if there’s at least some momentum for job growth, while the raw numbers reveal that there’s really none.
Though it’s tempting, and though their methodology is in several ways suspect, I want to be clear that I’m not accusing the folks at BLS of deliberately fudging the numbers — yet (that is almost certain to happen if fever-swamp leftist Erica Groshen, the Obama administration’s nominee to head the Bureau, ever worms her way into that powerful position).
What I am asserting is that the Bureau’s continued overemphasis on seasonally adjusted results in an erratic economy with little if any meaningful discussion of the underlying raw (i.e., not seasonally adjusted) data consistently gives the public an incomplete and often erroneous picture of the job market.
Four-plus years into the period of economic abnormality — which yours truly dubbed the POR (Pelosi-Obama-Reid) Economy in July 2008 when I first saw the train wreck coming — seasonally adjusted calculations, which try to interpret fluctuating employment patterns based on time of year, are of little value. That’s because we haven’t seen normal seasonality since early 2008. Instead, the POR Economy, with its awful recession and historically pathetic “recovery,” has overwhelmed the influence of seasonal factors. Supposed journalists in the business press, many of whom don’t even know that the seasonally adjusted results don’t represent what actually happened, lazily relay BLS numbers without any kind of meaningful follow-up.
In some months, the seasonally adjusted figures have understated the strength of the underlying job market. May 2012 was arguably one of them, while June was definitely not:
As seen in May’s blue boxes:
- In the private sector, the economy added more jobs in 2012 than it did in both 2011 and 2010 (90,000 and 112,000, respectively), but the barely different seasonally adjusted result for 2012 did not reflect that improvement.
- Overall, the economy added 131,000 more jobs in 2012 compared to 2011 (comparisons to 2010 aren’t meaningful because of decennial census hiring), but the 2012 seasonally adjusted result was only 23,000 higher.
That said, Team Obama had no real grounds for complaining about May 2012′s seasonally adjusted results. That’s because May’s seasonally adjusted figures fairly reflect what we would have expected to see if BLS had used May 2004 through 2007, the last four years during which the economy was exhibiting typical seasonality, as their basis.
June (the red boxes) is an entirely different story. This time, in both categories, actual 2012 job growth trailed 2011 by 60,000 or more; but again, the seasonally adjusted results hardly changed.
Combine the above comparisons of June 2012 and 2011 with a look at June 2004 through 2007, and you’re left wondering how Friday’s seasonally adjusted figures could possibly have come in as high as they did:
This year’s seasonally adjusted results are well outside the range of the five years presented in an unwarranted favorable direction. No one would have had any right to complain if the bureau had hung seasonally adjusted goose eggs in each category.
The bottom line is that in the historical context of recent non-recessionary years, June 2012′s raw numbers reveal a job market that has essentially ground to a halt — and that’s before we get to the important underappreciated observations Carson made at IBD:
- “The employment-to-population ratio for those aged 25-54 dipped to 75.6% in June, down sharply from 80% in January 2008.” That’s also lower than it was when the recession officially ended in June 2009. Millions of people in their prime earning years have dropped out of the workforce, and they haven’t seen a reason to try to get back in. If they were looking for work, the unemployment rate would more than likely be over 10%.
- “Entrepreneurial activity (is) fading. The number of startup firms has crashed from pre-recession highs, still near levels previously seen in the early 1980s.” This development throws into question the validity of BLS’s monthly “birth/death” adjustments. In June, it estimated that otherwise undetectable start-ups and very small businesses, net of those which went out of business, added 124,000 jobs. If it turns out that they’re only half-right, June’s real hiring activity was at a level one would see during a recession.
- “Meanwhile, the number of employees at startups has plunged, with a greater share of new firms with no employees — one-man shops.” In normal recoveries, entrepreneurs are eager to hire people to take advantage of extraordinary opportunities. That’s mostly not happening now, for a number of reasons, including mediocre economic growth, the uncertain costs of Obamacare, overbearing overregulation, and perhaps most ominously, “Taxmageddon,” which threatens to throw the economy into a full-blown recession next year — that is, if it isn’t already in one now.
Despite all of this, President Obama told an Ohio campaign event audience on Friday that June’s results were “a step in the right direction.” Labor Secretary Hilda Solis’s related press release claimed: “We remain on a path toward stable and durable growth.”
No they weren’t, and no we aren’t.
Old Lie Returns In New U.S. Jobs Report
By now, everyone has heard the “surprising” bad news: the BLS announced ‘only’ 69,000 net “new jobs” for the month. However, what the BLS hid from the Sheep was that it added 204,000 more fantasy birth/death jobs. Instantly that jobs-gain of 69,000 becomes a jobs loss of 135,000 – before the BLS has engaged in its two monthly “revisions”, where 10’s of thousands more fantasy-jobs will be erased.
With one more revision to come for April, and two ahead for May, what we see is already bad enough. In just April and May we already see more than ¼ million lost jobs in the U.S. economy. Understand that this is still just the tip of the iceberg when it comes to BLS deceit. I’ve already mentioned that it also uses “seasonal adjustments” as another means of inventing vast numbers of fantasy-jobs each year. But just as the U.S. government uses a vast array of “adjustments” to falsify its inflation numbers, it does the same with employment.
How many jobs has the U.S. economy really lost in April and May? When did the job-losses really begin? Was the U.S. economy ever producing positive jobs-growth during this mythical “recovery”? No one but a handful of strategically-placed members of the U.S. government (and the omnipresent Wall Street “insiders”) know the real answer to those questions.
Many continue to scoff at my unflinching dismissal of the “U.S. economic recovery” as nothing but a propaganda myth. The numbers strongly support my position. Ask the BLS itself where most of the U.S. jobs-growth has come from during this supposed recovery, and without hesitation the BLS will point to the “robust U.S. manufacturing sector” – where it claims most of these fantasy-jobs have originated.
Here’s the problem: since the start of the U.S. “recovery”, U.S. energy consumption and even electricity consumption has collapsed. So great has this collapse in energy consumption been that the Wall Street Journal recently trumpeted the news that the United States – the world’s great energy glutton of the past century – was now a “net energy exporter”.
Here’s another tidbit: unless the Department of Energy acts now to authorize the downblending of surplus weapons-grade uranium, the price of electricity is going to rise in 6-12 months, as Megatons to Megawatts expires. The only upside is that uranium price spikes only have about a 13% correlation with electricity prices, but still it takes a tremendous amount of energy to enrich uranium vs. almost none to downblend it .
How anyone in this country can accept or believe any statistic or any statement on any issue presented by this lying, deceitful, mendacious Marxist-riddled government and its corrupt bastard shills in the media is a continuing mystery I cannot hope to solve.
Roger that, over.
+2
AMERICAN: AN ENDANGERED SPECIES. HOW CAN ANY ADMINISTRATION BACKED UP BY LIES, DECEIT, SCAMS AND COVER-UPS BE SUCCESSFULL OR EVEN GOOD FOR THE PEOPLE??! WE ARE BEING “LED” BY THE MOST DEVIOUS, THE MOST CORRUPT INDIVIDUALS THIS COUNTRY HAS MANAGED TO “ELECT” AND ALL BACKED UP BY THE DUMBEST PEOPLE ON THE PLANET, THE MEDIA.
The media, is not the dumbest people around…..They know EXACTLY what they are doing….It is a willful lie meant to further the lies of the great one…The messiah, the most righteous one….small caps….the anoited messiah…..the DIRT BAG Comm. Orginizer from De hood of Chicago…..I speek of mr. prezz,
Oh`zamb0…..I cannot even say his name anymore…
But the stats we are getting are the same ones we got under Bush aren’t they ?
If the government is lying, and i believe it is, then it was lying before the commie jr, the used car salesman took office. But we accept these numbers year after year, so why shouldn’t the gubbermint keep feeding us the same BS ?
I didn’t believe the government bulls**t when it was spewed by Jorge Arbusto and his passel of RINOs, either. The US government has not had any legitimacy for a very long time. That’s the problem we have faced, now isn’t it? From Bush 41 to Clinton to Bush 43 to Hussein, the American people have been lied to for so long by so many from both parties that any sane person would long ago have recognized that the US government has become a criminally corrupt cadre of unrepentent liars, thieves, and murderers. Oh, yeah, and God Bless America!
And not that the GBO (Geithner-Bernanke-Obama) QE3 will be released ala “release the Kracken” onto the financial scene in order to help “stimulate” the economy. Meaning, of course, to have stock and commodity prices surge in order to continue the desired perception of “rcovery” and the feel-good of a rising stock market. And then the wave of “stock prices are leading indicators – see it’s working” for Obama’s charge to the finish. The GBO will likely wait until sometime in August to “catch the wave”.
The shame of it all is it will likely work. The traders will have a feeding frenzy. Even non-traders are prepping for QE3. Axlerod is polishing his schtick and Bernanke is out oiling the presses while Geithner is stoking the Euro.
“Attention all passengers on the cruiseship USA: Free samples of the good life are now being handed out on the port side of the ship. If you would all move to the port side, we promise to make this trip one never to be forgotten. Also, as part of our new policy, there will be a nominal tax on anyone not wanting to accept these free samples. Have a good day!”
12. 85,000 workers went on disability in June compared to 80,000 jobs created. Since June 2009, 3.1 million workers went on disability compared to 2.6 jobs created.
The job numbers also don’t take into account the fact that 0 just declare at least 800,000 “illegals” to be “legal” and a part of the labor force. Plus our population is growing by something on the order of 250,000 per month, and those numbers don’t seem to be account for, either. And, the employed/population ration over all, not just for the 25-54 year olds, is in the 58% range, well below the ratio encountered in a “healthy” economy. http://mercatus.org/publication/single-most-accurate-indicator-labor-market-health
So, when the liars, damn liars, and statistician meme meets the Obama regime well, guess what? The books are cooked.
I don’t think BLS has differentiated between citizens and legal permanent residents and illegal aliens and people here on temporary work visas for purposes of the monthly employment/unemployment reports (the current population survey and establishment survey). I don’t recall it being in any of the questions they ask (though it’s been several years since I looked).
Only in the last few years have they reported on US-born vs. foreign-born population and labor force participation rates (or employment/population ratios).
No, the numbers aren’t perfect, but they do a pretty good job short of going all draconian on us.
The Job Statistics for Seasonally Adjusted Private Growth for 2012
JAN
As reported
The Job Statistics for Seasonally Adjusted Private Growth for 2012
Jan Feb Mar Apr May Jun
As Reported 277 254 147 85 105 84
Adjstd per 9yr avg 261 294 299 162 170 87
Adjstd per Bush yrs 275 278 185 75 96 (17)
The numbers are being manipulated. Soltis should be called before Congress to explain why this happens and also Weekly Jobless Claims Report which has been understated in 69 out of the last 70 reports. I keep a spreadsheet and it is a disgrace. The only thing they do well is propaganda.
Schiff: European-Style Debt Crisis Will Strike US Monday, 09 Jul 2012 05:09 PM By Forrest Jones and John Bachman
http://www.moneynews.com/StreetTalk/schiff-european-debt-crisis/2012/07/09/id/444825?s=al&promo_code=F6C5-1
Well, I will accuse the BLS of deliberately fudging numbers. Or at least, holding back accurate numbers for as long as possible.
They did that with data regarding Wisconsin just before Walker’s recall election. Walker supporters had to dig for the accurate numbers, and Democrats freaked out because to them it was WRONG to release “corrections” before the BLS did it themselves.
But it did seem strange that the BLS “seasonally adjusted” March to March figures when they’re in the exact same season.
Nice to see that I am not the only one that has problems with the math. I thought I forgot how to do simple math.
jobs lost—–250,000 a WEEK (no*s approx )
jobs gained—-70,000 a month
disabled on welfare –80,000 a month
new to job market—–125,000 a month
need to know–retirees per month deaths of workers per month, how many are counted twice (work 1 wk-counted== work diff job 1week–counted as 2 jobs)
What formula are they using????
Another thing they should do is compare the numbers with labor force growth. If the labor force is growing (due to young people growing into working age, plus imm8grants, minus working age deaths and seniors reaching retirement age), which it normally does and still is now, then a very small jobs number, like these, is actually negative, since it does not even keep up with labor force growth. If you look at most of Obama jobs “growth” numbers for the past 3 yrs, using this metric, I suspect most of them are not keeping up with labor force growth, which means his “growth” was in a negative direction.
They do look at civilian population change, labor force change (by age ranges), people unemployed and actively seeking work (by age ranges), people who are unemployed and not actively seeking work, and people who are employed.
here are my graphs of some of their not seasonally adjusted numbers:
http://www.kermitrose.com/jgoEconData.html
My favorite for getting the general scheme of things in the Employment Situation report is a graph I call USACivPop and the version of it that just has the most recent few years. But I also look at various employment/population ratios and labor force participation rates, several ways to look at duration of unemployment, a very small number of industries and occupations, a sampling of a very few state unemployment rates, a sampling of counties within those states, and a sampling of metropolitan area figures likewise.
There are separate reports they release based on Job Openings and Labor Turnover Survey (JOLTS)… huh, the new one was released this morning. Haven’t looked at it for a while, but as I recall, some 2M people get jobs each month and about the same number lose jobs, but it’s the net of gains and losses that tells the story. The Employment Situation report (a combined report on the Establishment Survey and the Current Population Statistics/Household Survey) usually mentions the net gain or loss of jobs based on the Establishment Survey. There’s also a Business Dynamics report BLS produces.
The one thing they don’t do very well is report on people who are under-employed… simply because different people have different things in mind by that. They do look at people who are employed part-time who would prefer to be employed full-time. But, as far as they can tell, a former Nobel physicist driving a shuttle van for a car dealership repair shop is a fully-employed shuttle van driver, not an under-employed physicist; the former PhD-holding biophysicist is now a “fully employed” adjunct instructor at the junior college, not an under-employed biophysicist; the former software architect and data-base analyst and sys admin who’s now a pet-sitter they count as a fully-employed pet-sitter, not as an under-employed software architect…