Rubbish Unemployment Numbers from the Bureau of Lies & Statistics De Omnibus Dubitandum Matthew Collins, A-Letter Editor Among all the wonderful (but useless) economic data we got this week was a fresh report on the jobless numbers from the Bureau of Labor Statistics. Before we start, itâs worth noting that the first unemployment survey in America was conducted for a purpose⦠The officials in charge wanted to prove that our employment situation âwasnât that badâ. That plenty of Americans were employed. Itâs just worth noting the suspicious origins of Americaâs government-subsidized unemployment numbersâ¦because they seem to be manipulating the data toward the same goal today⦠The âBirth / Deathâ Model. So at the core of the BLSâ unemployment statistics are a host of assumptions⦠For one, they assume that many people who canât find a job donât count as âunemployed.â Anyone working part-time at a restaurant while he searches for a career is likewise, not unemployed. Essentially, you only count as âunemployedâ if you were laid off at no fault of your own â some time in the last six months â and you donât take a part-time job to pay the bills, and you donât stop looking for any period over a week or two. But those are just the real statistics. Behind them is the âBirth / Deathâ Model. Like Owner-Equivalent Rent (OER) in the CPI, this number is pure imaginationâ¦with no bearing on reality, its ultimate purpose is to allow the BLS to greatly skew their statistics, putting together âhard mathâ that backs up whatever party line they choose. The Birth / Death Model was intended to measure changes in employment at the micro-level. If Tomâs hardware shop went out of business â for example â then three or four people would be out of work. Not a large enough outfit for the BLS to keep tabs on, but itâs definitely small enough to follow the broad markets. So â for example â if there were a bunch of small mortgage shops that flipped subprime mortgages (which there were)â¦and a subprime bubble collapsedâ¦then the âBirth / Deathâ adjustments could be used to show that broad economic shift, even though it was carried out by a drove of small, nameless five-man shops in nowheresville, USA. Only problem is; thatâs not what happened. And it has ever since. A total of 800,000 jobs were added through this mysterious black box just in the last year. Is there any reason for this? Any factual basis? None has been provided, and itâs not likely that any will. But you donât need the BLS to tell you their justification. Instead, itâs plain as day⦠BLS reported 467,000 jobs lost in the last month. A horrible, giant numberâ¦but itâs still softer than reality. Because Birth / Death adjusted the number upward by 185,000 jobs. Again, they offer no evidence to back up this assumption. But instead of reporting total jobs lost as over 650,000, they got to squeeze it under a half-million. Which is good, because the Obama administrationâs existing unemployment estimates are already painfully off. In fact, theyâre almost funny at this point (just take a look at the chart below). So the lying definitely staves off panicâ¦it preserves whatever shred of economic credibility Obamaâs administration still has in the mainstreamâ¦and it helps the âgreen shootâ story. But it doesnât bring you or I any closer to the truthâ¦so it doesnât help our understanding of the economyâ¦and it doesnât stand to help our portfolios at allâ¦