The Real Memo Out Of The Bureau Of Lies And Stats: We Lost A Lot More Jobs Than 539k

Discussion in 'Wall St. News' started by ByLoSellHi, May 8, 2009.


    Zero Hedge


    Friday, May 8, 2009

    The Real Memo Out Of The Bureau Of Lies And Statistics

    Posted by Tyler Durden at 9:52 AM

    "We're leveling off! We're leveling off!"—so is the hope of TTT, Helicopter Ben, Larry the Wall Street Lackey and the rest of Team Obama. "This recession is leveling off!"

    No it's not: The unemployment figures just released by the Bureau of Labor Statistics are totally cosmetic: We lost a whole lot more than 531,000 unemployed.

    First, the "seasonal adjustment", which is a black box that can tweek me into looking like Dumbo the flying elephant. They're knocking off ±65,000 workers for no clearly discernible reason.
    Second, notice that the Census Bureau hired 60,000 people last month. Those workers (by definition) are temporary, and are a net cost to the economy, as they will not be adding marginal utility to any economic sector, the census being merely a social expenditure.

    Those two items alone turn 530,000 new unemployed into 655,000.

    Now notice how, once again, previous months' figures have been readjusted. This time, the readjustments weren't so bad—a mere 30,000 more unemployed in February, turning that month's official totals to 681,000, and another 30,000 for March, making that month's official number 699,000, just shy of that magic 700,000 monthly number (BTW, remember back in the good old days when 300,000 monthly unemployed was"shocking"?)

    But notice too: When those more realistic numbers were released, the markets were more or less copacetic—at least they weren't nervously contemplating another suicidal round of cliff-diving, as we currently are. Ever since the October '08 release of Sept. '08 unemployment, when arguably the BLS numbers had a role in triggering the sell-off of that very nasty month, the unemployment numbers have been generally rosy whenever there's been general nervousness in the markets around the time of the number's release. I know this sounds crazy-man paranoid, but bear with me: Every time the markets have been nervous,the BLS numbers look pretty good, or at least not that bad, relatively speaking—and then the next month the figures are very quietly revised, sometimes by as much as 35% on the upward side.

    I will bet one double Quarter Pounder with cheese and bacon that next month, the revisions of the April numbers will be on the order of an additional 85,000 unemployed. My guess is that, discounting the Census Bureau hirings, April saw 680,000 newly unemployed workers.

    That would mean that unemployment isn't accelerating—but it's still growing fast enough to scare the hell out of anyone sane. And anyway, what industry or sector of the economy will be able to absorb all of those unemployed workers in the near-term future?

    Now wait for May and especially June numbers, when 2 million new college grads can't find steady work.

    This baby ain't over yet.
  2. Ever More Unemployment
    by: Felix Salmon May 08, 2009

    I knew this morning’s jobs report was going to be depressing — and with unemployment rising from 8.5% to 8.9% last month, I was right. But the unemployment rate among adult men is even worse. Here’s the relevant bit of the release:


    As you can see, as recently as February, adult men were no more likely to be unemployed than the population as a whole. In the past couple of months, however, a nasty gap has opened up, and it’s widening.

    Yes, unemployment is a lagging indicator. But with adult-male unemployment rapidly approaching 10%, it’s also going to be a serious drag on the economy for the foreseeable future: households with unemployed men are not exactly engines of economic recovery.

    Incidentally, the other unemployment measure worth keeping an eye on, U6, a broader measure of underemployment, hit 15.8% last month, up from 13.5% in December. So while the headline payrolls number might have fallen less than economists had expected, I can’t really see any green shoots here.