Monday, February 6, 2012

Lies And More Damned Lies

I think the Bureau of Labor Statistics (BLS) should just change it's acronym to BS.

Funny how they make the unemployment issue look so rosy - as if to imply the economy is improving. The number 8.3% unemployment is smoke and mirrors. They reported that 243,000 jobs were created but they failed to highlight that 112,000 of those were low paying jobs (surge in part-time workers). But there was also an adjustment on population, which was supposed to bump up the pool of labor, however 1.2 million people left the labor force because those people stopped looking for jobs. It wasn't because they found work. They are just no longer being counted. (See cartoon below)

So 1.2 million people who are available to work, no longer are being counted in the unemployment figures. Add this to a quirky "seasonal January adjustment" and throw in a rise in temporary workers (who by the way have little to no benefits) and voila! the government can turn survey data showing a loss of 2.7 million jobs into a BLS reported gain of 243,000 jobs!

It's just like magic!

Even Rick Santelli exposed it on MSNBC:

The unemployment figure should actually be somewhere around 11.5%

Great analysis here at Zerohedge.
And while one can try to say it is inconceivable to say that the US population jumped by 1.7 million in one month, we reply that this is coming from the BLS whose admission of the "population control effect" adjustment merely confirms that it has been misrepresenting the actual labor force participation rate for at least a year. In other words, while one may pander to semantics, and believe that a data series is not a data series because of one's mastery of sophistry and assumptions, this is totally irrelevant: the end result is that in January, those "not in the labor force" did in fact rise by 1.2 million (whether compared to December or to 2011 - please, go ahead and check as many times as needed), and the labor force participation rate dropped to a new 30 year low of 63.7%, a number which incidentally only has to drop by 5% more percent for the BLS to report zero, or even a negative, unemployment rate.

All you need to know about how the BLS really counts unemployment in one simple cartoon: