The Jobs Report Truth

Discussion in 'Economics' started by Stockolio, Feb 2, 2019.

  1. Stockolio

    Stockolio

    I have been addicted to reading since a young age, and with my intellectual curiosity I can't seem to turn it off, it's like I have no choice and constantly gotta keep reading... I wanted to share some information gathered about the Jobs Report and why you shouldn't trade those outcomes, or think about the Economy due to these outcomes

    The Jobs number is always a guess at best, with the initial " guess " getting a lot more attention and exposure then it's reviewed reports by Mainstream Media, even still the reviewed reports likely still contain fiction, but more acceptable lies... The December Job report was 312,000 and got revised down to 222,000 on his first review for the Feb 1st report according to BLS... The second review is likely to see the report hover around 150-160, likely giving the 3rd version ( still fiction imo ) a decrease of 50 % from original one quoted by the White House... The latest report on Feb 1st had some very questionable ones, including the 52k construction jobs created in January, while were in a deflationary part of the cycle, is likely false. Others are , retail trade employment edged up by 21,000. Job gains occurred in sporting goods, hobby, book, and music stores (+17,000), while general merchandise stores lost jobs (-12,000).
    Employment in leisure and hospitality rose by 74,000. Within the industry, job gains occurred in food services and drinking places (+37,000) and in amusements, gambling, and recreation (+32,000). All part time jobs and numbers likely inflated

    I quote from a site :
    Even so, conspiracy theories about how the numbers are rigged have continued. Until recently, Trump himself was among the champions of those notions. In March, The Washington Post recounted 19 examples of the president dismissing the jobs data as fake before he took office. Example: “The unemployment number, as you know, is totally fiction,” Trump told an audience in Des Moines, Iowa, on Dec. 8, 2016.

    Trump has since changed his tune. He spoke very differently about the jobs data once it began to reflect positively on his presidency. On March 10, Sean Spicer, then the White House press secretary,
    said: “I talked to the president prior to this, and he said, to quote him very clearly;They may have been phony in the past, but it’s very real now.’”

    Here is a great well pieced article explaining some of it

    https://fivethirtyeight.com/features/the-jobs-report-is-overhyped-heres-why-thats-a-problem/
     
  2. Stockolio

    Stockolio

    This article explains the manipulation at hand... http://investmentresearchdynamics.c...ed-lies-statistics-and-the-employment-report/

    The labor force participation rate ticked up this month, from 63.1% last month to 63.2% this month. Great news, right? Umm, not unless shameless fraud designed to mask an economy headed for a depression is good news. The fraud in this case arises from the blatant manipulation of the two data points underlying the participation rate.

    The participation rate is simply the number of people in the labor force divided by the working age population (the latter of which is called the civilian non-institutional population). Stated differently, the participation rate is the percentage of working age people who are working or looking for work. So the labor force is slightly larger than the straight-up number of workers because it includes workers PLUS anyone who’s looked for work in that last 4 weeks.

    All three numbers—the participation rate, the labor force and the working age population—are reported each month. But only the participation rate gets any media attention (and precious little at that). This month, as noted, the participation rate ticked up 01% as noted.

    What’s curious, though, is that the labor force itself ticked down slightly, by 11,000 workers. For the participation rate to tick up, then, in the teeth of a shrinking labor force, means that the working age population had to have declined quite a bit. And that’s what’s weird—populations tend to increase, relentlessly so.

    Indeed over the last 60 years (720 months), the working age population has ticked down only 8 times. And guess what? By far the largest two declines occurred recently—this month and in January 2017 (when Trump was inaugurated). In both cases, the working age population supposedly shrank by 650,000 people! Holy shit! Neither Wyoming nor Vermont have 650,000 people in total, much less 650,000 working age people. Did the media miss a couple of huge meteor hits?
     
  3. sle

    sle

    Participation rate is NOT simply working age population, it's a fraction of the work-able population that is WILLING to seek employment. Here is a quick rundown. Working age population is 258 million, from them "Not in Labor Force" is about 95. Then there are "Marginally Attached" people numbering about 1.614 million and "Discouraged" of something like 0.4 million. That gives you a labor force of 163 million, give or take (64% of population).

    You can see the two series here:
    Labor Participation Rate: https://fred.stlouisfed.org/series/LNS11300060
    Working Age Population: https://fred.stlouisfed.org/series/LFWA64TTUSM647N

    Anything you read form a gold-bug website should be taken with a big brick of salt.

    PS. Now, if you want to float a conspiracy theory, it's the U-3 vs U-6 unemployment numbers. U-3 is the rate usually reported in the media, but in it BLS only counts people without jobs who are in the labor force. Which means they must have looked for a job in the last four weeks. The U-6 includes the underemployed (part-timers), the marginally attached (looked for work, but can't find anything), and discouraged workers (gave up looking for work). The U-6 number is about double the U-3 number because of that.

    PPS. Any numbers that are coming from the statistical surveys have to be taken as an estimate. I recall reading somewhere on this site that X number of people left NY in 2017 based on the recent census. That X (something like 40k people) was almost certainly smaller than the statistical error of the census process. Same goes for the employment numbers, it's going to have some errors built into it, so what you should be watching is a broad trend.
     
    Last edited: Feb 2, 2019
    Stockolio likes this.
  4. Stockolio

    Stockolio

    Since 1945, the official definition has been that to be considered unemployed, you must not only not have a job but be available for work ( not too sick to work ) and have actively looked for a job in the past four weeks. If you’re neither employed nor, according to the official definition, unemployed, you’re not considered part of the labor force... Basically, a large part of unemployed people are not considered as " unemployed " in statistics but are in reality

    Why it is worrying in my opinion is not cause politicians want to look good with it, but more that the Federal Reserve makes decisions based on a number of things, with this fake unemployment model being one of them... I think few tweaks on the definition of being counted as unemployed would be great
     
  5. sle

    sle

    If anything, from the Fed perspective, it's probably better to keep it consistent. They don't care about the actual unemployment, but more interested in the numbers compared to the historical level.

    Unemployment as a single number is a model, and any model would have some shortcomings. These shortcomings are ok as long as the issues are known and well understood.
     
  6. Stockolio

    Stockolio

    Makes sense
     
  7. Gotcha

    Gotcha

    Enjoying this discussion guys. Now what can you guys say about inflation? It seems like in order to keep the number low at 2%, they keep changing the way they calculate it. In many parts of the country, especially for Stockolio in Vancouver, Canada, things like food and housing have gone up so much from what I read that the inflation number is a joke.

    I believe that it was said that they change the basket of stuff they track the inflation value with, assuming that when one product gets too expensive, you substitute it for a lower value brand. But if you consider that the cost of living has gone up so much, how is the inflation number at all valid?

    Thanks.
     
  8. Stockolio

    Stockolio

    This reply is based on opinion and not facts... Inflation numbers they give aren't really accurate, I think inflation is higher on a yearly basis then 2 %, like you mentioned they hand pick Price Indices to make it look good. Standard of Living seems more difficult to maintain now then our parents era, even for basic necessities

    What I find scary is the inflation starting in 3-5 years time, once Basic Universal Income comes into play along with QE... QE's purpose is to inflate assets, but inflation is somewhat offset depending on level in productivity output, example Japan. As long as your society can be really productive economically it won't get out of control. Basic Universal Income will not go towards production in any way, it will mostly all go to consuming and likely have inflation much higher in no time, given the cost of living now, it would be crushing to any society... Other alternative politicians are proposing is Job guarantee, problem with that view is the Era of joblessness we are gonna enter in 5-10 years once Automation and 3D Printing really take over, IoT and 5G combined with Autonomous driving is gonna lead the charge into that era ( Amazon self driving 18 wheeler's are out already ). Job guarantee is literally socialism, likely to crush small businesses, encourage state owned enterprises and reduce the private sector to monopolies
     
    Gotcha likes this.
  9. Job numbers a total BS , they need to state what kind of Jobs , and hourly wage and the location.
     
  10. The job numbers are nothing more than a statistical extrapolation. It's really just one of a handful tools used buy the government to give the impression that the economy is well and growing, and to give an occasional boost to the markets. In large part, the 600 point move in the Dow on Jan. 4 was based on this number, and the desired effect was achieved after the December drubbing. I actually remember one report where the estimated number was achieved, only to be revised to 0. That's a 100% miss. Inflation numbers, GDP, take your pick, they're all so sugar coated, they rarely if ever reflect a factual reality. But it's of no consequence, because the market loves speculation and hype.
     
    #10     Feb 3, 2019