Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: BLS

There are Lies, Damned Lies and the Bureau of Labor Statistics

Mark Twain

Cover of Mark Twain

This article first appeared at The McAlvany Intelligence Advisor on Monday, May 5, 2014:

Perhaps the most famous quote regarding statistics comes from Mark Twain: “There are three kinds of lies: lies, damned lies and statistics.” The only trouble is that Mark Twain said it didn’t originate with him: he got it from British Prime Minister Benjamin Disraeli. But historians haven’t been able to find that phrase in any of Disraeli’s writings!

How appropriate is that? One cannot even validate a quote about statistics to prove

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Rosy jobs Report Headline fails to mask Continuing Underlying Weakness

English: CALEXICO, CA, 4-4-07 --- Hundreds of ...

Photo by Michael Raphael (Photo credit: Wikipedia)

The headlines from Friday’s jobs report from the Bureau of Labor Statistics (BLS) were rosy: employment rose by 288,000 (exceeding expectations) while the unemployment rate fell by 0.4 percent to 6.3, just above the rate dating back to September 2008.

The talking heads from the administration looked only at those headlines and took credit for the gains. Jason Furman, chairman of Obama’s Council of Economic Advisors, said

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America’s Welfare State is Thriving

Margaret Thatcher

Cover of Margaret Thatcher

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, April 30, 2014:

Former British Prime Minister Margaret Thatcher’s famous dictum, “The only trouble with socialism is that eventually you run out of other people’s money” isn’t factually correct, nor is it complete. Lazy thinkers assume from this that eventually the welfare state will just fade away like a bad cold or a nightmare, and that everything will be okay in the morning.

Here is what Thatcher actually said during an interview in 1976:

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BLS Reports one in five Families has no one Working

grateful

(Photo credit: woodleywonderworks)

In its awkward but astonishing revelation, the Bureau of Labor Statistics (BLS) reported on Friday that “of the nation’s 80.4 million families, 80.0 percent had at least one employed member in 2013.” Translation: 20 percent of those families had no one working in 2013!

How is that possible? The BLS defines a family as

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Friday’s Jobs Report: There’s Good News, and then…

On the surface Friday’s jobs report from the Bureau of Labor Statistics (BLS) wasn’t so bad: 169,000 jobs were created in August and the unemployment rate dropped slightly, once again, to 7.3%. This was slightly below expectations (180,000) but about in line with the average monthly gains over the past year.

But – and it’s a big but – not everyone is participating, and some of those numbers

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The Myth of the Disappearing Middle Class in America is Finally Put to Rest

This was first published at The McAlvany Intelligence Advisor on Monday, July 15th, 2013:

 

Two favorite economists, Donald Boudreaux of George Mason University and Mark Perry of the University of Michigan, have contested and decried the dominant social theme that America’s middle class is disappearing. For instance, back in January their arguments reached the pages of the Wall Street Journal in which they stated flatly that

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Friday’s Jobs Report In Line with Reduced Expectations

Friday’s report from the Bureau of Labor Statistics (BLS) only surprised those with unrealistic expectations about the health of the economy, showing that job growth of just 88,000 new jobs in March not only was far less than establishment economists had predicted, at 200,000, but

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Friday’s Surprisingly Strong Jobs Numbers Aren’t Real

At first blush Friday’s jobs report from the Bureau of Labor Statistics looked pretty good, catching establishment economists off-guard by about 80,000 jobs. Instead of the 160,000 new jobs expected in February, the BLS reported 236,000, which pushed down the unemployment rate to 7.7%. This came on top of a

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Union Protesters to Descend on Lansing Over Right to Work

Mitch Daniels - Right to Work for Less

Mitch Daniels – Right to Work for Less (Photo credit: DonkeyHotey)

Painting the issue in the darkest possible terms, labor organizer Dan Fingas said on his Facebook page that

Michigan’s far-right legislature slipped through Right to Work legislation without any debate. Without any input. And Michigan workers are under attack. It’s time to step up.

There will be a Rally at the Capitol on Tuesday, December 11th, at 8:00AM.

By the middle of the day on Monday, fewer than 1,200 people said they were going to attend, but the Michigan State Police aren’t taking any chances and are preparing for an overflow crowd at the Capitol Building which has a capacity of 2,000.

At issue is the nearly certain ratification of right-to-work legislation that both houses have already approved to make Michigan the 24th Right to Work (RTW) state in the nation. The final vote is scheduled for Tuesday.

Governor Rick Snyder has already indicated that he’ll sign the legislation, stating that

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The ADP Jobs Report for November Just Arrived

The ACP jobs report for November showed 118,000 new jobs were created in the private sector last month. This is hardly good news for the economy but better than I, or Wells Fargo, anticipated. The manufacturing sector is declining, confirming (as I noted yesterday) the recession call by ECRI last year. Wells Fargo thought we might see 80,000.

ACP isn’t the Bureau of Labor Statistics (BLS) which is the big mack-daddy of employment tracking. They use a different methodology than does ACP and sometimes there is a divergence. But over time both outfits’ numbers are very close.

To parse the details:

118,000 new jobs in November, down from 158,000 in October.

19,000 new jobs were created by small businesses in November, down from 50,000 in October.

And, as expected, the manufacturing sector lost 16,000 jobs.

In December a year ago people were excited to see nearly 300,000 jobs created in the private sector. Later it turned out that a lot of them were temp jobs for the holidays. Job creation never touched 300,000 since, muddling around at about 100,000 ever since. This isn’t enough to restore the economy to good health. Or, put another way, there isn’t enough entrepreneurial activity to justify hiring at a level sufficient to absorb new entrants.

And that’s the key understanding from today’s ADP numbers: regulations, uncertainty about the fiscal cliff, the awareness that Obama has little interest in reviving the economy because of his totalitarian ideology and commitment to reducing the US to just another weak socialist state are all combining to keep entrepreneurs – the real job creators – from taking a risk on the future.

I frankly don’t see much to change these numbers from ADP or the BLS going forward. ECRI’s recession call appears accurate: they think it started last July. Nothing here from ADP changes that outlook for the near future.

Latest Manufacturing Report Confirms ECRI’s Recession Call

Cogs and gears

Calling it “unexpected,” Reuters reported that the Purchasing Managers Index (PMI) from the Institute for Supply Management for November fell to its lowest level in over three years. A poll of economists by Reuters showed they didn’t see it coming.

The PMI covers the private sector and quizzes 400 purchasing managers in 18 different manufacturing sectors to get their view of market conditions from their perspective: better than last month, same as last month, or worse, along with any comments they wish to make. Any reading above 50 indicates the sector is growing, and below that it’s contracting.

Bradley Holcomb, the chairman of the survey committee, said:

 The PMI registered 49.5 percent, a decrease of 2.2 percentage points from October’s reading of 51.7 percent, indicating contraction in manufacturing for the fourth time in the last six months. This month’s PMI reading reflects the lowest level since July 2009 when the PMI registered 49.2 percent.

The New Orders Index registered 50.3 percent, a decrease of 3.9 percentage points from October, indicating [slowing] in new orders for the third consecutive month…

The Employment Index registered 48.4 percent, a decrease of 3.7 percentage points, which is the index’s lowest reading since  September 2009 when the Employment Index registered 47.8 percent.

Holcomb noted that unsolicited comments from the purchasing managers also reflect the slowdown:

From Food, Beverage & Tobacco Products: “We are in a lull.”

From Plastics & Rubber Products: “Differences between [the] first half of [the] year and [the] remaining half are very dramatic,   growing to a peak in the middle of the year with a gradual decline since.”

From Computer & Electronic Products: “Seeing a slowdown in requests for quotes [RFQ] activity.”

From Electrical Equipment, Appliances & Components: “Seeing a slowdown in demand across [all] markets.”

From Transportation Equipment: “Economy is every sluggish. Production is down and orders have slowed considerably from Q1.”

This report may have surprised the economists polled by Reuters but it certainly didn’t surprise Lakshman Achuthan, chief economist at the Economic Cycle Research Institute (ECRI), who called for another recession back in September, 2011. Following the prediction, The New York Times noted that ECRI not only correctly called the beginning and the end of the last recession, “it has gotten all of its

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Double-Digit Unemployment May Be the New Normal

AMERICAN PROPAGANDA POSTERS: OBAMA JOBS

(Photo credit: printthetruth)

After parsing the unemployment report that was issued by the Bureau of Labor Statistics (BLS) on Friday, November 2nd, two scholars at the Heritage Foundation, Rea Hederman and James Sherk,  concluded that at the present jobs growth rate it could take another five years for a full jobs recovery to occur from the Great Recession. That would place the recovery after the next presidential election in 2016 and nearly ten years after the start of the recession in December 2007.

Noting that 125,000 new jobs must be created every month just to keep up with population growth, they turned to the “jobs calculator” offered at the website of the Federal Reserve Bank of Atlanta and asked it to determine how long it would take for job growth to return to normal, based on the average job growth over the past three months (170,000). The answer: the summer of 2017.

This assumption that future job growth would be maintained at that rate is laden with so many difficulties and subject to so many unknowns as to call the entire exercise into question. This is called “straight line thinking in a curvilinear world,” or, put another way, this assumes that the future will look like the past. It probably won’t.

For instance, there is the “fiscal cliff” and the great uncertainty about how the lame duck congress will deal with it, if they deal with it at all. Great speculation abounds about various scenarios but each concludes that

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Looking Behind the Latest Jobs Report Numbers

JOB Toulouse

(Photo credit: JiPs☆STiCk)

On the surface, Friday’s jobs report from the Bureau of Labor Statistics (BLS) looked pretty good, and the response from establishment economists was predictable: the economy continues to grow, Obama’s policies are working, just give them time, and so forth.

For the record, BLS reported that “total non-farm payroll employment increased by 171,000 in October, and the unemployment rate was essentially unchanged [from September] at 7.9 percent.” It disclaimed any impact that Hurricane Sandy had on these numbers as the data upon which their report was based had been collected before the storm.

Diane Swonk, an economist at Mesirow Financial told CNBC: “The consumer’s feeling a little bit better…[employers] are not hiring out like crazy, but certainly you’ve got to welcome these kinds of numbers.” And Arne Kelleberg, professor of sociology at the University of North Carolina, claimed the report proved that “the fundamentals are strong. I do see the cyclical aspects of the unemployment situation being

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Political Problems for the Final Jobs Report

Obama sick and tired of someone dawdling about...

Obama sick and tired of someone dawdling about jobs? (Photo credit: porchlife)

On Monday the Bureau of Labor Statistics (BLS) said it was doing everything it could to make sure that Friday’s jobs report – the last one before the election – would come out on time, despite Hurricane Sandy.

The BLS is still smarting from attacks over its last report which showed an increase of 114,000 jobs in August, and a consequent drop in the unemployment rate from 8.1% to 7.8%. This was just too convenient to many observers. Jack Welch, former CEO of General Electric, tweeted “Unbelievable jobs numbers…these Chicago guys will do anything…can’t debate so change numbers.” Welch was referring to the volatility of the month-to-month reports from the BLS and the clear suspicion that, under the influence of his Chicago network (see Trevor Loudon’s Barack Obama and the Enemies Within) Obama was manipulating the numbers to offset his

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Romney Widens Electoral College Lead Over Obama

Obama vs. Romney 2012

Obama vs. Romney 2012 (Photo credit: DonkeyHotey)

The forecast of the 2012 presidential election by Michael Berry and Kenneth Bicker, political science professors at the University of Colorado, that was released in August has been updated with more current economic information, and the result is the same: a Romney win as the economy continues to falter.

It takes 270 Electoral College votes to win the presidency, and Berry and Bicker are projecting that Governor Mitt Romney will win 330 of the 538 votes up for grabs in November, while President Obama will receive just 208, down from the 213 they predicted in August.

It’s the economy. The model developed by the two professors has an uncanny track record, correctly predicting each presidential election since 1980, often with startling accuracy. In their paper originally published in August by the American Political Science Association [APSA] along with 12 other studies, it differed in its predictive “model” by looking at two essential pieces of the economic puzzle: changes in real per capita income — that is, net, after-tax, spendable income — and unemployment rates. But their model doesn’t just rely on the national numbers provided by the Bureau of Labor Statistics, which has been heavily criticized recently for its inexplicable drop in the unemployment rate while real jobs in the economy aren’t even reaching maintenance levels. It relies also on

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How Do the Poor Spend Twice Their Income?

Money Bankroll Girls February 08, 201114

(Photo credit: stevendepolo)

This report from the Bureau of Labor Statistics contains some startling and disconcerting news: those in the lowest income bracket take in about $10,000 a year, but spend about $22,000!

Here are the basics: there are about 24 million households in the bottom fifth of all households. Their disposable income, after taxes, is $10,074 a year. Their average annual expenditures total $22,001. They spend $3,547 annually on food, $8,771 on housing, $850 a year on clothing, $3,256 on transportation, $1,489 on health care, $981 on entertainment, and the rest on personal care items, education expenses, and tobacco. On average, they make charitable contributions of $687 a year.

So they’re going in the hole by $12,000 a year.

How do the poor do that? The BLS comes up with some possible explanations: drawing down

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Making Sense of Friday’s Jobs Report

Mitt Romney Steve Pearce event 068

Mitt Romney (Photo credit: Wikipedia)

The Bureau of Labor Statistics (BLS) issued its latest jobs report on October 5 and confounded nearly everyone. The first part of the report, based on their survey of households, showed a surprising — even astonishing — rise of total employment in September approaching a million jobs (873,000, to be exact). But in the same breath the report noted that, based on their survey of businesses, only 114,000 new jobs were added, about in line with most economists’ expectations.

When taken together, the BLS said that the unemployment rate dropped by three-tenths of a percent, from 8.1 percent to 7.8 percent.

This delighted Obama supporters who were still reeling from the beating their candidate received in the debate October 3 from Mitt Romney, who repeatedly used poor economic data, including continuing high unemployment numbers, to attack their candidate’s credibility.

Rex Nutting, writing for the usually neutral MarketWatch blog, said that the jobs report is the one “Obama has been waiting for” while costing Romney

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More on Friday’s Jobs Report

unemployment

unemployment (Photo credit: Sean MacEntee)

Much more! In fact, Mish’s analysis of that jobs report so far exceeded my own humble and inadequate attempt to do the same that it’s embarrassing. I’m glad he’s here to “bat cleanup.”

On the surface, this [report] is a solid showing, and 100% certain to boost the Obama campaign. I suggest these numbers will overshadow a horrendously weak performance by the president in the debate.

Yup. I agree. In fact some commentators have wondered about the timing, and the content, of the report. Some people continue to believe that the BLS – a government agency after all – is subject to political influence! That’s all I’m going to say about that.

Mish goes on:

That said, a closer look shows the entire drop in the unemployment rate can be attributed to a surprise rise of 582,000 in part-time workers. U-6 unemployment remained at 14.7%. (U-6 includes part-time workers who want a full-time job.)

Still, all things considered, this was the strongest report in four months.

Does it change my recession outlook?

No, it doesn’t. A one-month potential outlier based primarily on a rise in part-time employment, accompanied by other weak data does not change my perception.

After digging into the numbers, Mish notes:

Over the past several years people have dropped out of the labor force at an astounding, almost unbelievable rate, holding the unemployment rate artificially low. Some of this was due to major revisions last month on account of the 2010 census finally factored in. However, most of it is simply economic weakness…

Since the employment low in February 2010, nonfarm payrolls have expanded by about 4.7 million jobs. Of the 8.8 million jobs lost between January 2008 and February 2010, approximately 53% percent have been recovered (not accounting for normal demographics growth)…

In the last year, the civilian population rose by 3,701,000. Yet the labor force only rose by 1,059,000. Those not in the labor force rose by 2,643,000 to yet another record high 88,921,000.

In the last year, the civilian population rose by 3,701,000. Yet the labor force only rose by 1,059,000. Those not in the labor force rose by 2,643,000 to yet another record high 88,921,000.

That is an amazing “achievement” to say the least, and as noted above most of this is due to economic weakness not census changes.

Decline in Labor Force Factors:

  1. Discouraged workers stop looking for jobs
  2. People retire because they cannot find jobs
  3. People go back to school hoping it will improve their chances of getting a job
  4. People stay in school longer because they cannot find a job

Were it not for people dropping out of the labor force, the unemployment rate would be well over 10%. (My emphasis)

His conclusion:

Given the complete distortions of reality with respect to not counting people who allegedly dropped out of the work force, it is easy to misrepresent the headline numbers.

Digging under the surface, the drop in the unemployment rate over the past two years is nothing but a statistical mirage. Things are much worse than the reported numbers indicate.

Parsing Friday’s Employment Numbers

Bureau of Labor Statistics

Bureau of Labor Statistics (Photo credit: Wikipedia)

Confusing is a better word than surprising, to describe the report from the Bureau of Labor Statistics just released on Friday. Contradictions abound.

Total nonfarm payroll employment rose by 114,000, the U.S. Bureau of Labor Statistics reported today.

This is in line with previous performance and estimates by economists: the economy is weak. It is not adding enough jobs even to keep up with new job seekers entering the workforce. And it is significantly weaker than earlier this year, reflecting the recession that most observers – some reluctantly – say we are in.

But the other part of the report from the BLS contradicts the first part:

The unemployment rate declined by 0.3 percentage point to 7.8 percent in September. For the first 8 months of the year, the rate held within a narrow range of 8.1 and 8.3 percent. The number of unemployed persons, at 12.1 million, decreased by 456,000 in September.

In September, the number of job losers and persons who completed temporary jobs decreased by 468,000 to 6.5 million…

The number of persons unemployed for less than 5 weeks declined by 302,000 over the month to 2.5 million…

Total employment rose by 873,000 in September, following 3 months of little change…

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) rose from 8.0 million in August to 8.6 million in September. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

And the number of those not currently looking for work because they believe there are no jobs available for them declined to 800,000, down from 1 million a year ago.

It’s fair to say, then, two things: There will be a slight bump in stocks, at least early in the morning on Friday. Second, many will be looking closely at these numbers – as I am – and wondering what they mean. How can job growth be anemic while at the same time households are reporting that 873,000 more people found work last month?

Here is what one analyst has come up with:

One has to see this as a good report, and certainly better than expected. Consider these key points: Household jobs surged 873k, the labor force rose 418k, and the participation rate rose to 63.6. That of course cannot be sustained, but it is exceptionally strong. Net revisions totaled 86k on the payroll survey. That is the good news. The bad news is that it was virtually all government workers…

Aggregate hours posted a strong gain of 0.4% and the workweek was also solid rebounding back to 34.5 from 34.4, a whisker from the cycle high of 34.6 in February. Earnings were also strong on the month rising by 0.3%, the strongest gain since June and ahead of the expected gain of 0.2%.” — Eric Green, TD Securities.

National Employment Report Just In

English: manufacturing

(Photo credit: Wikipedia)

ADP’s National Employment Report was just announced early on Wednesday, and it doesn’t look good…again:

Employment in the U.S. nonfirm private business sector increased by 162,000 from August to September, on a seasonally adjusted basis. The estimated gains in previous months were revised lower: the July increase was reduced by 17,000 to an increase of 156,000, while the August increase was reduced by 12,000 to an increase of 189,000.  Employment in the private, service-providing sector expanded 144,000 in September, down from 175,000 in August. (emphases added)

Looking deeper into ADP’s report, of the 64,000 jobs created by medium-sized companies – those employing between 50 and 500 workers – 54,000 were created in the service sector. This is a nice way of saying that the increase in real jobs employing people to make real things such as refrigerators and automobiles was extremely weak.

ADP is a payroll company which monitors job growth more closely than does the more highly watched Department of Labor’s Bureau of Labor Statistics, which is due out shortly. ADP’s report is often a leading indicator of the BLS report.

Inside the report, here are some interesting numbers: In September, 111.4 million people were employed (total nonfirm private jobs) compared to 110.6 million back in April. That works about to be an average gain in employment of about 162,000 jobs per month. Not enough to absorb newcomers looking for work, which is causing many to stop looking. This, of course, skews the unemployment rate.

But assuming (as I do) that most of the real jobs are in the “goods-producing” sector, in September there were 18.244 million people employed there, while back in April 18.185 million people were – a scant increase of just 59,000 over five months, hardly enough to get excited about, and certainly not enough to pronounce the economy as “robust.”

ADP has an “addendum” to its report: Manufacturing (as opposed to goods-producing) grew from 11.775 million jobs in April to…ready?…11.789 million in September. That’s 14,000 jobs created over five months, or less than 3,000 jobs a month.

The accompanying charts are dismal, as well, showing essentially flat-line growth (is that a contradiction in terms?) for an economy that supposedly started growing “officially” in June of 2009, according to the National Bureau of Economic Research.

Translation? Not much happening here. Still waiting for the Federal Reserve’s stimulus to kick in.

Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.