FacebookTwitterGoogle+RedditEmail

Are the Payroll Jobs Reports Merely Propaganda Statements?

by

shutterstock_134687783

US economics statistics are so screwed up that they do not provide an accurate picture.

Consider the latest monthly payroll jobs report.  According to the report, in January 151,000 new jobs were created.  Where are these jobs?  According to the report, 69% of the new jobs are accounted for by retail employment and waitresses and bartenders.  If we add in healthcare and social assistance, the entirety of the new jobs are accounted for. This is not the employment picture of a First World economy.

According to the report, in January the retail sector added 57,700 jobs.  Considering that January is the month that followed a disappointing Christmas December, do you think retailers added 57,700 employees?  Such a large increase in retail employment suggests an expected rise in sales, but transportation and warehousing lost 20,300 jobs and wholesale trade added only 8,800.

Perhaps it is mistaken to think that employment in these sectors should move together.  Possibly the retail jobs, if they are real, are part-time jobs replacing a smaller number of terminated full-time jobs in order that employers can avoid benefits costs.  If this is the case, then the retail jobs are bad news, not good news.

The reported unemployment rate of 4.9% is misleading as it does not count discouraged workers.  When discouraged workers are added, the actual rate of US unemployment is about 23%, a number more consistent with the decline in the labor force participation rate. In January 2006 the labor force participation rate was 66%.  In January 2016 the labor force participation rate is 62.7%.

The government has a second official unemployment rate that counts short-term discouraged workers (discouraged for less than one year).  That rate, known as U-6, is 10%, twice the “headline rate” which is always the U-3 measure that excludes all discouraged workers not currently looking for a job.

In his reports John Williams (shadowstats.com) explains that the jobs reported can be an artifact of seasonal adjustments.  Perhaps a simple way of seeing the influence of seasonal adjustments is to compare the not seasonally adjusted jobs numbers for December 2015 and January 2016.  These numbers are 144,112,000 jobs in December and 141,123,000 jobs in January, a decline of 2,989,000.  However, with seasonal adjustments the January number rises to 143,288,000 and the December number falls to 143,137,000, producing a January jobs gain of 151,000.

Payroll jobs are the number of jobs, not the number of employed people.  Many of the payroll jobs are part-time.  In order to make ends meet, some people hold two or more part-time jobs. In contrast to the 143,288,000 reported payroll jobs, civilian full-time employment is about 123,000,000.

Another factor that distorts the jobs reports is the birth-death model. Based on John Williams’ expertise,  I have often reported on this effort by the BLS to estimate the net of unreported jobs losses from business closures and the unreported jobs gains of new start-ups.  Here is John Williams in his latest report on the January payroll jobs:

“Historically, an upside-bias process was created for payroll-employment reporting simply by adding in a monthly “bias factor,” so as to prevent the otherwise potential political embarrassment to the BLS of understating monthly jobs growth. The “bias factor” process resulted from such an actual reporting embarrassment, with the underestimation of jobs growth coming out of the 1983 recession.

“That process eventually was recast as the now infamous Birth-Death Model (BDM), which purportedly models the relative effects on payroll employment of jobs creation due to new businesses starting up, versus jobs lost due to bankruptcies or closings of existing businesses.

“Separately there is a preset upside bias, plus a presumed net additional “surplus” of jobs added  on to the payroll estimates each month as a special add-factor. In current reporting, the aggregate average overstatement of monthly employment change easily exceeds 200,000 jobs per month. These details and section shall be updated fully in the pending Supplement.”

The assertion that the US economy has been in recovery since June of 2009 is not consistent with the quantity and quality of the jobs reflected in the payroll jobs reports. The number of new jobs is not sufficient to prevent the labor force participation rate from declining, and the pay associated with the jobs is not sufficient to leave consumers with enough discretionary income to drive an economy based on consumption.

The financial presstitutes do not explore these issues.  They merely report the numbers that the official releases emphasize and ask no questions about them.  Therefore, the decline in American economic prospects receives no attention.  The Federal Reserve can even report that half of American 25 year-olds live at home with their parents without causing alarm.  They do this not from choice but from necessity.  They simply cannot find jobs that pay enough to support an independent existence. You would think that this would be an issue of national concern.

Paul Craig Roberts is a former Assistant Secretary of the US Treasury and Associate Editor of the Wall Street Journal. Roberts’ How the Economy Was Lost is now available from CounterPunch in electronic format. His latest book is The Neoconservative Threat to World Order.

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

March 30, 2017
William R. Polk
What Must be Done in the Time of Trump
Howard Lisnoff
Enough of Russia! There’s an Epidemic of Despair in the US
Ralph Nader
Crash of Trumpcare Opens Door to Full Medicare for All
Carol Polsgrove
Gorsuch and the Power of the Executive: Behind the Congressional Stage, a Legal Drama Unfolds
Michael J. Sainato
Fox News Should Finally Dump Bill O’Reilly
Kenneth Surin
Former NC Governor Pat McCory’s Job Search Not Going Well
Binoy Kampmark
The Price of Liberation: Slaughtering Civilians in Mosul
Bruce Lesnick
Good Morning America!
William Binney and Ray McGovern
The Surveillance State Behind Russia-gate: Will Trump Take on the Spooks?
Jill Richardson
Gutting Climate Protections Won’t Bring Back Coal Jobs
Robert Pillsbury
Maybe It’s Time for Russia to Send Us a Wake-Up Call
Prudence Crowther
Swamp Rats Sue Trump
March 29, 2017
Jeffrey Sommers
Donald Trump and Steve Bannon: Real Threats More Serious Than Fake News Trafficked by Media
David Kowalski
Does Washington Want to Start a New War in the Balkans?
Patrick Cockburn
Bloodbath in West Mosul: Civilians Being Shot by Both ISIS and Iraqi Troops
Ron Forthofer
War and Propaganda
Matthew Stevenson
Letter From Phnom Penh
James Bovard
Peanuts Prove Congress is Incorrigible
Thomas Knapp
Presidential Golf Breaks: Good For America
Binoy Kampmark
Disaster as Joy: Cyclone Debbie Strikes
Peter Tatchell
Human Rights are Animal Rights!
George Wuerthner
Livestock Grazing vs. the Sage Grouse
Jesse Jackson
Trump Should Form a Bipartisan Coalition to Get Real Reforms
Thomas Mountain
Rwanda Indicts French Generals for 1994 Genocide
Clancy Sigal
President of Pain
Andrew Stewart
President Gina Raimondo?
Lawrence Wittner
Can Our Social Institutions Catch Up with Advances in Science and Technology?
March 28, 2017
Mike Whitney
Ending Syria’s Nightmare will Take Pressure From Below 
Mark Kernan
Memory Against Forgetting: the Resonance of Bloody Sunday
John McMurtry
Fake News: the Unravelling of US Empire From Within
Ron Jacobs
Mad Dog, Meet Eris, Queen of Strife
Michael J. Sainato
State Dept. Condemns Attacks on Russian Peaceful Protests, Ignores Those in America
Ted Rall
Five Things the Democrats Could Do to Save Their Party (But Probably Won’t)
Linn Washington Jr.
Judge Neil Gorsuch’s Hiring Practices: Privilege or Prejudice?
Philippe Marlière
Benoît Hamon, the Socialist Presidential Hopeful, is Good News for the French Left
Norman Pollack
Political Cannibalism: Eating America’s Vitals
Bruce Mastron
Obamacare? Trumpcare? Why Not Cubacare?
David Macaray
Hollywood Screen and TV Writers Call for Strike Vote
Christian Sorensen
We’ve Let Capitalism Kill the Planet
Rodolfo Acuna
What We Don’t Want to Know
Binoy Kampmark
The Futility of the Electronics Ban
Andrew Moss
Why ICE Raids Imperil Us All
March 27, 2017
Robert Hunziker
A Record-Setting Climate Going Bonkers
Frank Stricker
Why $15 an Hour Should be the Absolute Minimum Minimum Wage
Melvin Goodman
The Disappearance of Bipartisanship on the Intelligence Committees
FacebookTwitterGoogle+RedditEmail