Remember last Friday's payrolls numbers -- the ones that blew away expectations about the number of jobs created and got everyone talking about recovery again?
Well, even at the time those payroll numbers were confusing, because the other part of the jobs report -- the "household survey" -- showed yet another crappy number. But by pointing to the crappy household number and ignoring the payroll number, the bears seemed to be trying to make lemons out of lemonade.
But it turns out that there was a simple reason why the payroll numbers looked so good -- a reason that had nothing to do with underlying strength of the jobs market. What was that reason?
The government changed the "seasonal adjustment" it made to the payroll numbers -- and, in so doing, boosted the number of "jobs" created in October by 100,000.
Stephanie Pomboy of MacroMavens (via John Mauldin) explains:
"The seasonal bar which the payroll data must jump was (inexplicably and dramatically) lowered from prior Octobers."Thus, in October 2009, the BLS set the bar at 870,000 jobs, similar to the 840,000 it anticipated in October 2008. This year, by contrast, it lowered the bar to 768,000. Mumbo, jumbo, payrolls presented "an upside surprise" of 100,000."
Alan Abelson of Barrons (again via John Mauldin) adds the following:
"According to John Williams at Shadow Government Statistics, the BLS' fiddling with the figures via what he calls 'seasonal-factor games' actually created 200,000 phantom jobs last month. John cites such finagling as the reason his prediction of an October decline and a rise in the jobless rate was wrong. It also explains why seasonally adjusted payrolls were revised upward by 110,000 in September, including 56,000 in August."
In other words, it wasn't that there were a surprising number of jobs created in October. It was that the government changed its "seasonal adjustment" assumption in a way that made it look as though there were a surprising number of jobs created in October.
Now, seasonal adjustment is an art not a science. And maybe the new seasonal adjustment is more defensible than the old one. But if our government is going to publish a number like this that represents such a major "surprise," we would expect it to at least be upfront about the reasons for the surprise. And in this case those reasons had NOTHING to do with the jobs market, and EVERYTHING to do with the seasonal adjustment assumption.
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There was a step-by-step logic to all of the measures that were taken to misrepresent basic economic statistics. Big business could not have carried out the policies it required without falsifying economic reality. Even though daily life became increasingly difficult for huge sections of the working class, it was necessary to divide and disorient, to intimidate millions with the claim that “there is no alternative,” and that what Reagan referred to as the magic of the marketplace was creating a veritable golden age from which everyone would benefit.
Some of the consequences of the falsification of data can be translated into dollars and cents. If the CPI had not been systematically understated, Phillips explains, Social Security checks would be 70 percent greater than they currently are.
Beyond the direct impact on Social Security and other government expenditures, an artificially low unemployment rate and poverty rate (officially reported as 12 percent, but in fact at least twice that figure) helped the financial and political establishment to reduce living standards and social conditions. How many countless think tank reports and magazine articles, trumpeted by Democratic and Republican politicians and academic figures alike, took as the gospel truth that the “Anglo-American” model of capitalism, compared to its more regulated rivals in France and Germany, meant lower unemployment?
This and similar claims were based largely on lies.
http://madconomist.com/data-fudging-101-the-history-of-us-government-statistics-manipulation
Example;
Fact-There are fewer televisions in third world countries
Fact-There are higher death rates in third world countries
Does this mean that the lack of televisions in third world countries directly impacts the death rates in those same countries? Come on folks, use your head a little and don't depend upon one single source of information.
This was too late for an "October Surprise", this was not some conspiracy.
There is no such thing as "the government", just people who work there. Those job figures come from an obscure group of government workers, most of whom also worked for Bush if not Clinton. It's the Civil Service System, spoilage was ended after Pres McKinley was killed by someone he refused to offer a job.
Like CBO data, this comes from accountants, not from some conspiracy called "the government". You sound like the Tea Party when you start demonizing our government that way. They want to destroy and privatize it, this kind of paranoia helps.
Not her fault, but she capitalized on it...big time.
Before 2000, the monthly new job calculation involved a "plug factor" adding an average of 35k jobs per month which Labor felt were real, but missed in their calculations (Mom&Pop hire Buddy to mop the floor of the soda shop, etc).
Geniuses in the Labor Dept analytics nerd room created a model that would rise and fall with collected data in an effort to get a more accurate count. Included were "seasonal factors" and others. So far, so good.
Problem came when the model started to add hundreds of thousands of jobs during the W years
that would have not been reported during the Clinton boom years.
Not a problem for W, naturally...attaboy, Elaine.
So...whadda we know? Not enough for this author to be ginning up the masses...folks, he don't get it! Or he does, and his little profit-taking buddies want some tax cuts for the wealthy. That really helped...created billions of jobs during W
We need more jobs...and the GOP is still the party of no...no new jobs.
Obama needs to steamroller them for some stimulus...it worked...why isn't that in the zeitgeist?
So, as tepid as W's job creation was...it was even worse compared to the 90's.
That would have been Nov 12... 10 days after the election. Which makes it a little hard to belive anyone thought it would have any impact on the election.
Or are you trying to say that since there were elections happening in Nov, companies hired folks in Oct? Which makes even less sense.
I must not buy normal things, because pretty much everything I buy costs more just about every time I purchase it. Don't other people buy gasoline, electricity, heating energy, food? Because all of those have gone up for me.
But we don't have inflation, just like the job market is starting to boom.
Gas...gas goes up and down more then a porn star. Two weeks ago gas in my area was $2.35, then some one sneezed and it went up to $2.85, then down to $2.77 where it is now. Why? No one knows.
Electricity...they tell me that they had to raise the price of electric due to fewer people using it, and the company needing to make as much in profits as they normally do.
But as a republican..... that's where the jobs are. Go forth and get one and be happy! Then we can get rid of all the migrant farm workers that are STEALING ALL OUR JOBS! Not serious, hope you could tell.
I worked on my uncles farm as a teen, I don't remember what I made an hour but after taxes it was around $90 a week for 40 hours. I would make the same amount as my second job as warehouse help in a store, in about 30 hours. Didn't take long to figure that one out.
They have stated their main goals for the next 2 years are repeal Health Care Reform, stop Obama from getting reelected, and balance the budget.
Jobs? ::crickets::
Government conspiracies is Tea Party stuff. There are no large conspiracies, large groups of people do not keep silent. They just work there, they are not slaves.