This isn’t exactly ‘flip your wig’ material but they recently ‘revised’ the unemployment figures due to, yup, you guessed it, the birth/death model assumptions being way off.
How bad were they? How about 824,000 or roughly another million that they had counted as still being employed! Perhaps more damning is we are still seeing reports of ‘new claims’ hovering in the 550,000 PER WEEK range…which would mean the overall number is actually much higher than even this sorry revision suggests!
Yes good citizen, we can only account for eight million being ‘officially’ unemployed yet depending on your source, the figure jumps to as high as 19 million! (Which ‘coincides’ roughly with the number of foreclosures there have been since the beginning of the real estate collapse.)
But if we take into account that you are not considered ‘unemployed’ once you’ve exhausted your benefits…that creates another large and getting larger, gray area.
Since there is no good way to tell for sure how severe the unemployment problem is, we may as well proceed to tonight’s offering…
Early Job Cuts Worse Than First Thought, as More Companies Go Belly Up
By Kelly Evans
The loss of 263,000 jobs last month brings the total drop in U.S. employment to 7.6 million since the recession began — and revisions suggest the losses could turn out to be even steeper.
Total U.S. nonfarm employment as of March was probably lower by 824,000 than previously thought, or about six-tenths of a percent, the Bureau of Labor Statistics said Friday, reflecting the unusual severity of job losses during the first quarter. [Job losses that began in earnest during the final months of the Bush administration…]
“Most of the additional job loss… appears to be due to in part to an increase in the number of business closings,” said BLS Commissioner Keith Hall in a statement. [Which is pretty weird considering how badly the ‘birth/death’ model skewed the monthly figures with ‘make believe’ jobs…which begs the question, can a business that never opened its doors actually go ‘belly up’?]
The findings come from preliminary benchmark revisions released Friday along with the monthly employment report, which will be finalized and published on Feb. 5 of next year. The annual revisions, based on unemployment insurance tax reports, give a more accurate view of the labor market than the government’s monthly surveys. [As we have seen, there are huge discrepancies between the ‘new claims’ filings and the ‘estimates’ garnered from the ‘phone surveys…]
The benchmark revisions are typically small, raising or lowering employment levels by around two-tenths of a percent. But not this time.
The BLS’s birth/death model underestimated just how many businesses were folding — particularly during the January through March quarter — as the recession worsened. [Although this is NOT what they SAID the birth/death ‘model’ was telling them! I mean hell, hasn’t the whole ‘green shoots’ thing been based on ‘less worse’ results across the board?, less worse results that nobody could measure and that refused to show up on any known economic indicator except the (heavily manipulated) stock market?]
Economists had been bracing for a downward revision, but not necessarily one of this magnitude, which means the U.S. has likely shed more than 8 million jobs since December 2007. For example, in a note Thursday, Goldman Sachs economist Ed McKelvey said he expected the revision to be “on the order of -150,000 to -200,000.”
“It’s a huge number, much more than usual,” said Nigel Gault, chief U.S. economist at IHS Global Insight. The government’s models “tend to assume dying firms get replaced, but that didn’t happen.”
Mr. Gault said the revisions suggest the economy was doing even worse in the first quarter than previously assumed, and cast doubts on the recovery. [No shit, Sherlock! Where was this ‘genius’ back in March when this ‘totally unfounded rally’ began?]
One temporary silver lining: it could be good news for corporate profits in the just-finished third-quarter, since firms saw increased sales while continuing to cut back on wages and salaries, he said. “But then, where’s the future demand coming from?” [Um, in case nobody noticed, the price of energy has been rising constantly in ‘lock-step’ with equities…chances are damn good this accounts for the ‘increase’ in consumer spending…]
“Today tells us employment’s going down, hours worked are down, incomes are falling — so how can we sustain robust growth in consumer spending in that environment? The consumer doesn’t have to lead the expansion,” he said, “but the consumer has got to be part of it.”
How’s that for an ‘October Surprise’? It seems most government statistics have been ‘mis-under-estimated’ for quite some time.
I’m pretty sure this isn’t the kind of ‘bi-partisanship’ Mr. Obama was expecting when he failed to completely clean out the appointees of the previous administration…
Me? I don’t have anything else to add here, the story sort of speaks for itself.
Thanks for letting me inside your head,
Gegner
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