Obama Administration Overstated Employment by 902,000 Jobs in 2009

Discussion in 'Politics' started by Trader666, Oct 7, 2010.

  1. Job losses in 2009 likely bigger than thought

    By Lucia Mutikani
    WASHINGTON | Thu Oct 7, 2010 4:21am EDT

    (Reuters) - The economy likely shed more jobs last year than previously thought, but analysts say the undercount by the government should prove less severe than it did during depths of the recession.

    The Labor Department on Friday will give an initial estimate of how far off its count of employment may have been in the 12 months through March. The government admitted earlier this year that its count through March 2009 had overstated employment by 902,000 jobs.

    Analysts expect a much smaller miscount this time, given the economy's growth spurt in the second half of last year.

    The department blamed its 902,000 miss on faulty estimates of how many companies were created or destroyed, and it has not yet made any changes to the so-called birth-death model that produces this projection.

    Once a year, it compares payroll data from its monthly surveys of employers with unemployment insurance tax reports, which give it a much more comprehensive view of actual employment. It uses these tax records to produce a "benchmark revision" to adjust for discrepancies.

    "That adjustment is probably overstating the employment gains because we are in a very subdued recovery and the likelihood is that the birth-death factor is making the data look better than it otherwise would be," said Neil Dutta, an economist at the Bank of America Merrill Lynch in New York.

    Tax records will probably show more businesses closed than initially estimated by the Labor Department, analysts said.

    "It's not going to be that severe (as last time). A lot of it is sort of aligned with the performance in the broader economy," Dutta said, noting that the economy picked up in the second half of 2009 and entered this year strongly.

    Other economists shared that view, while some said it was even possible that employment would be revised upward, citing other data, including a separate Labor Department survey of households, that had outperformed the monthly payrolls count.

    They also said that while the department had not changed the birth-death model, it had incorporated new data from a period in which business start-ups were weak.

    "Potentially, the model could have underpredicted for a time. With the incorporation of this new data you may see an upward revision," said Zach Pandl, U.S. economist at Nomura Securities International in New York.

    "In our view, the risks are tilted toward an upward revision."

    Whatever the outcome, it will probably have little implication for U.S. monetary policy, given that it is backward-looking and the economic recovery is very weak by historical standards.

    But it could shed more light on the nature of the unemployment problem confronting the economy, with opinion increasingly divided on whether it is cyclical or structural.

    Analysts will be looking at the sectors where job losses are concentrated. Steeper job losses than already reported in manufacturing and construction could strengthen the argument of a structural unemployment problem.

    "It's difficult to argue we don't have a structural unemployment problem because roughly half of the jobs lost were in manufacturing and construction," said Dutta.

    "That also means more than half of job losses were in services. It argues that there is a decent amount of cyclical unemployment out there that we can take down by stimulating our economy more aggressively."

  2. October 7, 2010
    Gallup Finds U.S. Unemployment at 10.1% in September
    Underemployment, at 18.8%, is up from 18.6% at the end of August
    by Dennis Jacobe, Chief Economist

    PRINCETON, NJ -- Unemployment, as measured by Gallup without seasonal adjustment, increased to 10.1% in September -- up sharply from 9.3% in August and 8.9% in July. Much of this increase came during the second half of the month -- the unemployment rate was 9.4% in mid-September -- and therefore is unlikely to be picked up in the government's unemployment report on Friday...

  3. Food Stamp Recipients at Record 41.8 Million Americans in July, U.S. Says
    By Alan Bjerga - Oct 5, 2010 3:46 PM CT

    The number of Americans receiving food stamps rose to a record 41.8 million in July as the jobless rate hovered near a 27-year high, the government said.

    Recipients of Supplemental Nutrition Assistance Program subsidies for food purchases jumped 18 percent from a year earlier and increased 1.4 percent from June, the U.S. Department of Agriculture said today in a statement on its website. Participation has set records for 20 straight months.

    Unemployment in September may have reached 9.7 percent, according to a Bloomberg News survey of analysts in advance of the release of last month’s rate on Oct. 8. Unemployment was 9.6 percent in July, near levels last seen in 1983.

    An average of 43.3 million people, more than an eighth of the population, will get food stamps each month in the year that began Oct. 1, according to White House estimates.
  4. Obama was in office for two months in March 2009, and yet somehow they managed to overstate the numbers for the entire year, at least, leading up to that date?
    I don't even know how to describe this. It's misleading beyond anything I've seen yet, and this place produces all kinds of steaming crap.
  5. JamesL


    Well, if you are saying that they possibly couldn't know based on how long they were in office, then they shouldn't have guessed. Christ, anyone here could do that.
  6. The BLS - Bureau of Labor Statistics - is responsible for this. They work very hard on it, and if you'd actually read the article, you'd know that the probability of the number actually being better than what has been reported is actually higher than the probability that it was worse.
    So, the title of this steaming crapload is misleading in two ways:

    1 - The Obama Admin, just like the Bush Admin before it, by the way, has precisely nothing to do with how this number is reported, and
    2 - It's more likely it will show a better than a worse number.

    This stuff is not child's play. Whether the establishment number or the household number is closer to reality depends on all kinds of variables. The stupidity that gets posted on this board on the employment numbers is beyond ignorant.
    The title of this thread, meantime, is a lie, pure and simple.
  7. "In March 2004, when Barack Obama was a candidate for the U.S. Senate in the Illinois Democratic primary, he excoriated President George W. Bush for creating a "jobless recovery." The month he said that, 334,000 new jobs were created—none of them temporary Census ones—and unemployment was 5.8%.

    That was then. Now the unemployment rate is 9.6%, and tomorrow's jobs report is unlikely to be much better.

    Many other Democrats piled on Mr. Bush at the time. "Mr. President, where are the jobs?" Rep. Nancy Pelosi asked on CNN in October 2003. "The American people will not settle for—nor should the Republicans celebrate—a jobless recovery." That month saw 203,000 new jobs and 6% unemployment. Her party would kill for such a rate today."
  8. I wonder how that will affect the number of jobs that Obama claimed the stimulus saved or created :confused:
  9. Tsing Tao

    Tsing Tao

    will be interesting to see the 6 month birth/death adjustment released with the job report today. considering the weekly new jobless claims number has been upward revised for 23 of the past 24 releases, i think we can safely say that the bls is in the business of statistic manipulation.

    the whole model is flawed, corrupt and broken.
  10. Wrong. Obama is responsible for it. You're confused by Obama's incessant blaming of everyone else for his failures. The BLS is a unit of the Department of Labor which is a cabinet department so Obama owns them.
    #10     Oct 8, 2010