Jobs and unemployment numbers are figments of corporate political PR

Statistician John Williams ( writes: “The July employment and unemployment numbers published today, August 3rd, were worthless and likely misleading.” ... The government that lies to you about weapons of mass destruction in Iraq, about Iraq’s al Qaeda connections, about the Taliban in Afghanistan, about Osama bin Laden, about Libya and Gadhafi, about Iranian nukes, about Syria, about Pakistan, about Yemen and Somalia, about Bradley Manning, about Julian Assange and Wikileaks, indeed about everything under the sun, also lies to you about jobs, unemployment, economic recovery, GDP growth,  the “terrorist threat,” everything.  Try to find anything that the government has said over the past 6 presidential terms that is not a lie.-- Paul Craig Roberts, Counterpunch, August 6.
Judging from how accurate Dr; Roberte has been through the years and the amount of time and effort John Williams has put into tracking government statistics, and arguing from our own common sense and experience, we are inclined to believe the government has rigged thejobs and unemployment numbers the way the big banks rigged the LIBOR rates for lending to each other. In fact, as far as policies are concerned, it is getting harder and harder to distinguish between bank policy and government policy. At least it is certain that the two great institutions agree on the necessity for lying to the people about important matters in the political economy. Banks have been so successful at this that there are few politicians who know of such a thing as a political economy and no mainstream economists that will admit it exists. In fact, few of them could find it if they tried. Looking at the Whole Thing gives them the vapors.
Badlands Journal editorial board
Agence France

US economy creates 163,000 jobs, shielding Obama

WASHINGTON (AFP) - The US economy created a solid 163,000 jobs in July, official data showed Friday, helping President Barack Obama dull Republican attacks despite a slight uptick in the jobless rate.

The Labor Department said unemployment rose 0.1 points to 8.3 percent, in a monthly report that was nevertheless heralded as evidence that the world's largest economy is still on track.

Economists had predicted a much more modest creation of 100,000 jobs during July, after a weak increase of 64,000 in June.

"Finally, we have some good news on the employment front," said Nigel Gault, an economist with IHS Global Insight. "The report will alleviate fears that the US might be tipping back into recession."

The service, manufacturing and food and drink sectors were among those showing gains, as the economy created more jobs than at any time since February.

Markets reacted positively, with the Dow Jones Industrial Average surging 1.7 percent or 217 points while the government's cost of borrowing fell.

Oil prices soared more than $4 a barrel on the prospect of stronger demand in the world's largest market for crude.

With fewer than 100 days to go until the US presidential election, White House contenders seized on the report's seemingly mixed message in order to shape the tone of the debate.

Republican Mitt Romney zeroed in on the politically symbolic unemployment rate, now the highest since February.

"Today's increase in the unemployment rate is a hammer blow to struggling middle-class families," Romney said in a statement, as he pledged to create 12 million jobs in his first term.

"We've now gone 42 consecutive months with the unemployment rate above eight percent. Middle-class Americans deserve better, and I believe America can do better."

However, Obama's top economic adviser Alan Krueger echoed the Labor Department's observation that the unemployment rate was "essentially unchanged."

"The rate rose from 8.217 percent in June to 8.254 percent in July," he said, well within the report's margin of error.

The unemployment rate and the job creation figures are taken from two separate Labor Department surveys released simultaneously.

The jobless rate is the result of a survey of 60,000 households, while the payrolls increase comes from a poll of 140,000 businesses and government agencies.

The mixed picture provided by the two surveys may make it difficult for Romney to steer the debate back onto the economy and away from issues that have seen him drop in the polls.

Over the past month, Romney has faced criticism for not releasing more tax returns, as well as for diplomatic missteps, his dealings at Bain Capital and his tax plan -- which independent analysts said would raise rates for the middle class.

As a result, Obama has opened up a two-point lead in national tracking polls in key swing states like Florida, Ohio and Pennsylvania, leaving Romney with plenty to do if the election is not to slip through his fingers.

Obama reacted soberly to the report, saying more work was needed to climb out of the deepest crisis since the 1930s.

"We have still got too many folks out there who are looking for work, we have got more work to do on their behalf," the president said as he again bashed Republican tax plans.

Democrats will also take hope from the fact that unemployment among Hispanics fell 0.7 points to 10.3 percent and the rate for adult women stood at a relatively low 7.5 percent -- both groups are crucial for Obama to win the election.

Friday's data is unlikely to be instrumental in deciding whether the Federal Reserve embarks on a new round of stimulus spending.
Before the Fed meets in September, policymakers will receive August's jobs report.


More Lies From Big Brother
Inside the Latest Jobs Report

In his report on the Bureau of Labor Statistics’ latest jobs and unemployment report, statistician John Williams ( writes: “The July employment and unemployment numbers published today, August 3rd, were worthless and likely misleading.”

I will spare the readers an explanation of Williams’ account of the manipulation that is occurring as it is too arcane for the general reader.

Instead, Let’s just apply common sense.  According to the BLS, there were 163,000 new nonfarm payroll jobs created in July. This figure is about 13,000 more jobs than is needed to keep pace with population growth.  Therefore, the unemployment rate should have declined fractionally.  Instead, the unemployment rate (U3) rose from 8.2% in June to 8.3% in July.

In case you missed the point, new jobs, a net figure, rose and so did the unemployment rate!

Moreover, the alternative, but much less reported, jobs report from the Household Survey found that the economy lost 195,000 jobs in July.

The government that lies to you about weapons of mass destruction in Iraq, about Iraq’s al Qaeda connections, about the Taliban in Afghanistan, about Osama bin Laden, about Libya and Gadhafi, about Iranian nukes, about Syria, about Pakistan, about Yemen and Somalia, about Bradley Manning, about Julian Assange and Wikileaks, indeed about everything under the sun, also lies to you about jobs, unemployment, economic recovery, GDP growth,  the “terrorist threat,” everything.  Try to find anything that the government has said over the past 6 presidential terms that is not a lie.

Other than some minor insignificant detail, “your” government has been consistently lying to you about everything of importance.

“Your” government lies to you, because “your” government has an agenda that it most certainly will not tell you about, because if you knew what it is, you would revolt. Putting down the revolt would divert the government from its agenda.  It would also alert the rest of the world to the fact that the US government has an undeclared agenda of world domination, despite the costs to the American people and every other people. World War III looms.

Nuclear annihilation is the necessary outcome of the neoconservatives’ drive for US world hegemony. Syria can fall, and Iran can fall, but Russia and China are unlikely to accept their reduction to puppet state status. As both are nuclear armed and as the crazed criminals in charge of the US government are wallowing in hubris, nuclear war seems inevitable.

The world’s most mortal enemy is Washington.  If Washington prevails, the world will be dead or in slavery to Washington, including all american subjects, whether Democrats or Republicans.

Don’t let it ever be said that your enemy, whatever your country, has not been identified.

Paul Craig Roberts is a former Assistant Secretary of the US Treasury and Associate Editor of the Wall Street Journal.  His latest book,  Wirtschaft am Abgrund (Economies In Collapse) has just been published.

John Williams'Shadow Government Statistics
Analysis Behind and Beyond Government Economic Reporting    


A Series Authored by Walter J. "John" Williams

"Employment and Unemployment Reporting"
(Part Two in a Series of Five)

August 24, 2004

The Bureau of Labor Statistics (BLS), U.S. Department of Labor, conducts two monthly surveys of U.S. employment and unemployment. Results usually are released on the first Friday of the month following the survey:

Household Survey (also Current Population Survey) -- The household survey generates the unemployment rate from a statistically designed monthly sampling of roughly 60,000 households. Other surveys, such as the annual poverty survey, often are piggybacked on the employment questions. The survey measures the number of people who have jobs.

Payroll Survey (also Establishment or Current Employment Statistics Survey) -- The payroll survey generates an estimate of the number of nonfarm jobs in the U.S. economy, based on a monthly non-random sampling of payroll tax filings of about 160,000 U.S. corporations and government agencies. The survey measures the number of jobs (some individuals hold more than one job).

The household survey is conducted during the week that includes the 12th of the month. The payroll survey is conducted as of the payroll period that includes the 12th of the month. Other than for seasonal factors, the household survey gets revised only with series or population redefinition. The payroll series is revised for two months following the initial release and then again in an annual benchmark revision.

Where the household survey includes farm workers, the self-employed and workers in private homes, the payroll survey does not. The payroll survey counts jobs, making no adjustment for multiple jobholders. Yet, adjusting for all differences, the BLS never has been able to reconcile the two series within one million jobs.

Conventional wisdom in the financial community is that the payroll survey is more accurate, given its larger sampling base. To the contrary, the household is scientifically designed, and the error can be estimated to any degree desired. The payroll data are haphazard at best, and the BLS has no idea of potential reporting error.

The BLS estimates a 90% confidence interval for a change in the unemployment rate of ±0.22%, and a 90% confidence interval for the monthly change in payrolls of ±108,000. The BLS, however, admits the payroll survey's confidence interval is not solid, given built in biases and the lack of randomness in the monthly sample.

The payroll survey used to include a regular monthly bias factor of about +150,000 jobs. Those jobs were added each month for good measure, as an estimate of jobs created by new companies. Companies that went out of business generally were assumed to be employing the same number of people as before they went out of business.

In the last couple of years, the BLS has modeled and seasonally adjusted its bias factor; there is no more guesstimation. Accordingly, new monthly bias factors have ranged from -321,000 to +270,000 during the last year. This, combined with continuous seasonal adjustment revisions, has added to the volatility of recent monthly reporting.

Suggesting that the household survey is more accurate than the payroll survey, however, does not mean household survey accurately depicts unemployment. While its measures have definable statistical accuracy, the accuracy is related only to the underlying questions surveyed and to the universe of people surveyed.

The popularly followed unemployment rate was 5.5% in July 2004, seasonally adjusted. That is known as U-3, one of six unemployment rates published by the BLS. The broadest U-6 measure was 9.5%, including discouraged and marginally attached workers.

Up until the Clinton administration, a discouraged worker was one who was willing, able and ready to work but had given up looking because there were no jobs to be had. The Clinton administration dismissed to the non-reporting netherworld about five million discouraged workers who had been so categorized for more than a year. As of July 2004, the less-than-a-year discouraged workers total 504,000. Adding in the netherworld takes the unemployment rate up to about 12.5%.

The Clinton administration also reduced monthly household sampling from 60,000 to about 50,000, eliminating significant surveying in the inner cities. Despite claims of corrective statistical adjustments, reported unemployment among people of color declined sharply, and the piggybacked poverty survey showed a remarkable reversal in decades of worsening poverty trends.

Somehow, the Clinton administration successfully set into motion reestablishing the full 60,000 survey for the benefit of the current Bush administration's monthly household survey.

While the preceding concentrates on the numbers that tend to move the markets, the household survey also measures employment. The payroll survey also surveys average hourly and weekly earnings and average workweek.

Addendum to Installment One (Published 9/7/04)

Bureau of Labor Statistics' Correction to Payroll Survey Description

In response to my comments on the "non-random" and "haphazard" nature of the payroll employment survey in Installment One, the Bureau of Labor Statistics (BLS) advised that my information was outdated, that the payroll survey used scientifically designed probability sampling, which had been phased in over several years and completed as of June 2003.

I was aware of the changes to the system, but did not think they improved the quality of the reported results much. I have just reviewed the BLS's current sampling methodology and have not changed my mind. While I may have used inaccurate terminology in describing the sampling method for the series, my general comments remain, and I still believe the household survey to be the more accurate of the two.

The household survey is proactive in nature and designed and sampled so its results can be determined with measurable statistical confidence.

While the payroll survey sampling approach may be sounder statistically than it was several years ago, it still is responsive, in nature, subject to whatever is reported or not reported by U.S. corporations. While individual companies are selected at random for following, the universe they are selected from still is not random and can vary meaningfully with changing times. An element of haphazardness is inherent in the universe of reporting companies.

During a recession, for example, firms go out of business and stop reporting, but the BLS does not know whether a company is out of business or did not report for some other reason. This supposedly is accounted for by the business birth (creation)/death (going out of business) modeling of companies, which replaces the old bias factor system.

There is no way to model these numbers with any meaningful accuracy, and the monthly swings in the birth/death data now often are greater than the reported monthly changes in total payrolls.

The BLS has a Herculean task in trying to measure monthly payrolls with meaningful results, and it has expended significant effort to improve its system. Nonetheless, it is difficult to see noticeable improvement in monthly reporting quality. Contrary to BLS expectations of improved results, I would be extraordinarily surprised if revisions to the series don't get larger, as opposed to smaller, as a result of what now is probably over-modeling of the series.

This already is evident in the monthly revisions to some individual industry series that I follow closely. It will be interesting to see how large the next several annual benchmark revisions are for the new system.

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