Eric De Groot: The Trends Clearly Show The Worm Has Turned In The Labor Market

Chart 1:  Birth/Death Model (BDM) Contribution to Nonfarm Net Payrolls (NFP) Added/(Lost)

The only problem I had with former GE CEO Jack Welch's comments were "what took him so long"?

These numbers have been manipulated for political effect for the past two - three years. The most recent iteration is just the final pomp-pomp waving, get out the vote effort for Team Obama. A "he may have lost the debate but he killed Osama, saved GM and gosh darn it, saved the whole economy" type of affirmation.



If you really want to understand what the figures mean, the hyper-partisan mouth breathers are not the place to go. Bloomberg, with it's Obama-gushers or CNBC with it's "battle of the talking-heads" won't work either.

Read guys like Erik DeGroot, Doug Sort and Mish Shedlock, who are outside the mainstream, but provide solid, honest economic analysis.


Eric De Groot: The Trends Clearly Show The Worm Has Turned In The Labor Market:

For anyone not completely incapacitated by election year rhetoric and/or politics, please consider the following:

2010-2012 economic recovery has produced far fewer jobs than 2004-2006 (chart 1). 

          The 2003-2007 economic recovery was considered extremely weak.

The US driven by generations of excessive spending, ever-increasing socialism, and uncompetitive international taxation has slowly transformed its economy and labor force from the manufacturing to service hub of the world.  Service-producing jobs as a percentage of nonfarm payrolls have increased from 60% to 86% since 1953 (chart 2).  American have come to know this economy as swapping Made in the USA for Designed in the USA label and a steady decay in real hourly earnings and standard of livings for generations.

 No matter how the statiticians jigger the labor numbers to hide the trends, the worm has turned in the labor market.  The jobs creation histogram which studies both job creation/(destruction) and labor force participation peaked in early 2012 (chart 3)."

'via Blog this'

A Closer Look at the September Employment Report

By Mike "Mish" Shedlock

October 5, 2012

http://advisorperspectives.com/dshort/guest/Shedlock-121005-September-Employment-Report.php

Grossly Distorted Statistics

Given the complete distortions of reality with respect to not counting people who allegedly dropped out of the work force, it is easy to misrepresent the headline numbers.

Digging under the surface, the drop in the unemployment rate over the past two years is nothing but a statistical mirage. Things are much worse than the reported numbers indicate.

Only 114K New Jobs,
But the Unemployment Rate Drops to 7.8%

By Doug Short

October 5, 2012

http://advisorperspectives.com/dshort/updates/Unemployment-and-the-Market.php


This is a lot more folks than just Jack Welch questioning the reliability / accuracy of the numbers. The conspiracy of the numbers shell-game does not have to come from the BLS itself BTW. It's more a failure of the methodology in the context of the current environment that has made the number so politically charged. The folks on the other end of the "household survey" could be distorting the number.

from the Economic Collape blog:
http://theeconomiccollapseblog.com/archives/a-jobs-report-conspiracy

The following is a sampling of skeptical quotes about this jobs report....

Former GE chief Jack Welch

Unbelievable jobs numbers..these Chicago guys will do anything..can't debate so change numbers

Chapwood Capital Investment Management Managing Partner Ed Butowsky

I feel like I’m watching a movie. There is no way in the world these numbers are accurate.

Neil Irwin of the Washington Post

"Weird that payrolls are exactly on forecast but household survey is far better."

Conn Carroll, senior editorial writer for the Washington Examiner

While it is highly improbable that BLS conspired to cook the books, there is still a huge 756,000 job gap between the number of jobs employers told the Labor Department they created in September (114k), and the number of Americans who told the labor department that they got new jobs (873k).

U.S. Representative Allen West

I agree with former GE CEO Jack Welch, Chicago style politics is at work here. Somehow by manipulation of data we are all of a sudden below 8 percent unemployment, a month from the Presidential election. This is Orwellian to say the least and representative of Saul Alinsky tactics from the book "Rules for Radicals"- a must read for all who want to know how the left strategize . Trust the Obama administration? Sure, and the spontaneous reaction to a video caused the death of our Ambassador......and pigs fly.

Gluskin Sheff's David Rosenberg

That the 7.8 percent jobless rate takes it to the level that prevailed when the President took office in January 2009 has raised many an eyebrow. I don't believe in conspiracy theories. But I don't believe in the Household Survey either. 

This notoriously volatile indicator has become even more so in recent months. It showed a 195K slide in July and a 119K decline in August, to only then reveal a massive 873K surge in September.

Radio host Laura Ingraham

"Jobs #s from Labor Secretary Hilda Solis are total pro-Obama propaganda--labor force participation rate at 30-yr low. Abysmal!"

Americans for Limited Government

"Either the Federal Reserve, which has its fingers on the pulse of every element of the economy, and the Bureau of Labor Statistics manufacturing survey report are grievously wrong or the number used to calculate the unemployment rate are wrong, or worse manipulated. Given that these numbers conveniently meet Obama's campaign promises one month before the election, the conclusions are obvious."

Rick Santelli of CNBC

"I told you they'd get it under 8 percent — they did! You can let America decide how they got there!"

BTW, here's more fuel for the "conspiracy" fire. How can we take any of these numbers seriously? How can this thing called inflation be 2% under one methodology, 5% under another and 9% under another.



from Blacklistednews.com:
http://www.blacklistednews.com/The_Inflation_Rate_Is_A_Lie_Too/21894/0/38/38/Y/M.html

Can we believe any of the economic numbers that the government is feeding us these days?  Most of the focus recently has been on the bizarre jobs report that the government released last Friday, but the truth is that the inflation rate is a lie too.   In fact, the way that the government calculates inflation has changed more than 20 times since 1978.   The government is constantly looking for ways that it can make inflation appear to be even lower. 

According to John Williams of shadowstats.com , if inflation was measured the same way that it was back in 1990, the inflation rate would be about 5 percent right now.  If inflation was measured the same way that it was back in 1980, the inflation rate would be about 9 percent right now.  But instead, we are expected to believe that the inflation rate is hovering around 2 percent.  Well, anyone that goes to the supermarket or fills up their vehicle with gasoline knows that prices are going up a lot faster than that.  Just about everything that we buy on a regular basis is steadily becoming more expensive, and so most Americans are not buying it when government officials tell us that there is barely any inflation right now.

John Williams is not the only one doing research into these inflation numbers.  According to the American Institute for Economic Research, the real rate of inflation was about 8 percent last year.  The following is an excerpt from a story that was recently posted on the website of Pittsburgh's NPR news station....

The federal government says that consumer prices rose moderately last year, but if you think the cost of everyday purchases increased more than that, then you’re probably right according to the American Institute for Economic Research (AIER).

The Bureau of Labor Statistics’ Consumer Price Index (CPI) was up 3.1% in 2011. However, AIER’s Everyday Price Index (EPI) indicates most Americans saw their day-to-day costs increase by 8%. That’s because the EPI excludes housing, automobiles, furniture, appliances and other items purchased occasionally.

 All using methods that the government has used in the past? Because it serves THEM, not US to portray inflation as lower, therefore they FIND a method that makes it so.

 It's been going on for decades folks, by both parties.

I hate to break the news to some of you folks who still believe in Santa Clause, the Easter Bunny, the Tooth Fairy and Obama, but your government lies to you. This administration is just more brazen about it than most.

Coming from the guy who was described -- by one of his current BFF's -- as the "Biggest Fairy Tale ever", why should we really be surprised  that we feel like we are living in an Alice in Wonderland world. BTW, Clinton blisters the media and their rose-colored glasses in the same rant.

Bill Clinton on Obama: Big Fairy Tale

The (ever) growing list of Obama lies:

http://townhall.com/tipsheet/guybenson/2012/08/08/busted_team_obama_caught_lying_about_cancer_ad

http://visiontoamerica.com/12437/wh-spokesperson-okay-fine-weve-been-lying-about-romneys-tax-plan/

http://townhall.com/tipsheet/guybenson/2012/06/21/four_pinnochios_for_latest_obama_attack