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Faux job numbers could lead to real trouble

hypocritexposer

Well-known member
So if they are counting jobs that do not exist, what will that do to expected tax revenue, and thus the budget?

Look's like obama's deficit is about to grow.


Deception is a dangerous thing. You never really know when a lie may turn on you.

Take, for instance, the Labor Department's annual springtime boost in the faux jobs market. While it's nice that the government thinks there is an employment boom coming, this won't be a good development if that boom turns out to be imaginary yet still causes the Federal Reserve to prematurely tighten credit conditions.

Let's start from the beginning.

Early this month Labor reported that 216,000 new jobs were created in March. It was better than Wall Street expected.

But the figure included 117,000 jobs that the department thinks, but can't prove, were created by newly formed companies that might not even exist. In fact, the department is getting so optimistic about the labor market that it increased this imaginary job count from just 81,000 in March, 2010.

As I've been telling you for months, the spring always causes the Labor Department to goose its job-creation numbers. And maybe sometime in the future this process will be warranted. But during 2009 and 2010 these springtime assumptions -- which are officially called the Birth/Death Model by Labor -- led to major errors in the annual job count.

The next three months should be doozies. In April 2010, the Labor Department guessed that 188,000 jobs were created by these newly formed, maybe nonexistent companies; last May's total job number was jacked up by a 215,000 guess, and June got an artificial boost of 147,000 jobs.

This year, Labor will likely be inserting even bigger faux job totals for each of those three months.

In other words, you still might not be able to get a job in the real world, but there should be plenty of fake jobs for the newspapers to write about and the politicians to brag about in speeches. Why should you care?

If you are just a regular person reading this column you should be appalled that Washington has trouble getting its numbers right. But wait, there's more.

Interest rates have already been rising because (and I don't need to tell you this) inflation is a problem. Mortgage rates, for instance, have moved three-quarters of a percentage point higher over the past six months. And that's without the Federal Reserve purposely tightening credit conditions.

The next three months' job figures -- if they are as strong as I think they will be -- could give the Fed a compelling reason to, at the very least, end the money-printing operation it calls Quantitative Easing. And it may even have to start talking about raising interest rates.

That won't be good news for either bonds or stocks, the latter of which have been on a truly unbelievable ride upward. Remember the first investment advice you received (probably from your mom or dad): if it's too good to be true, be suspicious.

It's gonna get exciting especially when you see what happens by summer. (But that's for a future column.)

*

Is the federal government like one of those hoarders you see on TV?

It buys into projects and programs (resulting in a clutter of $12 trillion in debt) but is pained when it needs to get rid of just $39 billion of those programs.

The government is a mess -- just like the homes you see on TV. And the picture isn't going to get any prettier when someone, at some time, tries to get the government's house in order.

*

Home sales are still plunging, and prices are going down, down, down.

Well, maybe it's time to listen to John (that would be me). Change the rules on retirement plans so the American people can rescue the ailing real estate industry, which, by the way, will take a decade to fix if left on its own.

Let people withdraw a relatively small percentage of the $15 trillion in retirement funds to purchase real estate. Give them a tax break -- maybe even a big one.

And smack Wall Street down when it voices the inevitable opposition to this plan. (Remember, the money I'm proposing to be used for this idea is now in retirement plans mainly invested in Wall Street products.)

Maybe it is time for a plan that's reasonable and doesn't risk bankrupting the nation or ruining our currency.

Ya know, I'm just thinking out loud.

*

How hilarious is it that Mayor Bloomberg thinks last year's census wildly undercounted the number of people who live in New York!

I spent column after column last Fall report ing how ridiculously badly the census was being handled through out the country. Census workers wrote in from all over to tell me how crazy the operation was. People taking the tally in New York said it was the most disorganized operation they had ever seen.

So, why would a miscount surprise the mayor?

But he's asking that things be corrected now! Why didn't he speak up when the census was still being done? Sorry, Mr. Bloomberg, you snooze, you lose federal funds.

Read more: http://www.nypost.com/p/news/business/faux_job_numbers_could_lead_to_real_3zKnIS84fd4XYOLbEK48GL#ixzz1JMLgk7HH
 

Steve

Well-known member
every time I see the unemployment rate drop, I get a sinking feeling there was a bit of fudging in the numbers..

Last week's surprisingly sharp decline in the unemployment rate from 9.4% to 9% and equally surprising anemic job growth -- 36,000 new jobs -- left a lot of investors scratching their heads. How could the unemployment rate plummet so significantly while a such a trivial number of new jobs were created?

To understand this, let's consider a labor force of 100 people, of which 20 are unemployed. The unemployment rate is 20%. But if 10 unemployed people drop out of the labor force, that reduces the total labor force to 90, and the number of unemployed to 10. As if by magic, the unemployment rate is now only 11%, even though the number of people with jobs remains unchanged.

This is the "magic" behind last week's astonishing decline in the unemployment rate.

job-losses-recessions.jpg
http://www.dailyfinance.com/story/careers/real-unemployment-number/19833935/

household-data-2011.jpg


for their numbers to work, we would have had to have lost 795,000 workers,.. (retired of dropped off the unemployment roles).. (est 600,000 quit or lost unemployment benefits/status)

but the reality is, with graduations, immigration, ect. ,.. we gained 1,872,000 (nearly 2 million workers without a job entered the market last year).. and somehow they are not getting counted???

So where did the 2,667,000 people with out jobs go to? (1.11% of the workforce)

we have gone from 9.7% to a march projected "Unemployment Rate:
8.8% in Mar 2011"

a drop of .09% Did they get jobs.. NO, they were somehow removed from the roles.. or never made it on the roles,

in reality, the rate should be over 9.9% today.. if you use their numbers, and assume their numbers last year was honest as well,.
 
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