Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
Spring Fund Drive: Keep CounterPunch Afloat
CounterPunch is a lifeboat of sanity in today’s turbulent political seas. Please make a tax-deductible donation and help us continue to fight Trump and his enablers on both sides of the aisle. Every dollar counts!
FacebookTwitterGoogle+RedditEmail

One More Jobs Mirage

The announcement on March 4 that 192,000 new jobs were created in February was greeted with a sigh of relief. But the number is just more smoke and mirrors, as I will show shortly.  First, let’s pretend the jobs are real.  What areas of the economy produced the jobs?

According to the Bureau of Labor Statistics, 152,000 of the jobs or 79 per cent are in private services, consisting of:  11,700 jobs in wholesale trade, 22,000 in transportation and warehousing, 36,400 in administration and waste services (of which 15,500 are temporary help services), and 36,200 in ambulatory health care services and nursing and residential care facilities. Entertainment, waitresses and bartenders accounted for 20,000. Repair and maintenance, laundry services, and membership associations accounted for 14,000.

As one who has often reported the monthly payroll jobs breakdown, I am struck by the fact that these categories are the ones that have accounted for job growth for year after year.  How can this be?  How can Americans, who have had no growth in their real incomes and who are foreclosed from their homes and maxed out on credit card debt, car payments, and student loans, spend more every month in bars and restaurants?  How can a few service areas of the economy grow when nothing else is?

The answer is that there were not 192,000 new jobs.  Statistician John Williams estimates the reported gain was overstated by about 230,000 jobs.  In other words, about 38,000 jobs were lost in February.

There are various reasons that job gains are overstated and losses understated.  One is the BLS’s “birth-death model.”  This is a way of estimating the net of non-reported new jobs from business start-ups and  job losses from business shut-downs. During recessions this model doesn’t work, because the model is based on good times when new jobs always exceed lost jobs. On the “death” side, if a company goes out of business because of recession and, therefore, doesn’t report its payroll, the BLS assumes the previously reported employees are still in place. On the “birth” side, the BLS adds 30,000 jobs to the monthly numbers as an estimate of new start-ups.

Williams estimates the “death” side is really reducing employment by about 200,000 per month, and the “birth” side is stillborn. Therefore, “the BLS continues regularly to overestimate monthly growth in payroll employment by roughly 230,000 jobs.” The benchmark revisions of payroll jobs bear out Williams. The last two benchmark revisions  resulted in a reduction of previously reported employment gains of about 2 million jobs.

Another indication is that despite 10 years of population growth, there are 8 to 9 million fewer Americans employed today than a decade ago.

Some “New Economy” we have. If only we could have the old one back.

PAUL CRAIG ROBERTS was an editor of the Wall Street Journal and an Assistant Secretary of the U.S. Treasury.  His latest book, HOW THE ECONOMY WAS LOST, has just been published by CounterPunch/AK Press. He can be reached at: PaulCraigRoberts@yahoo.com

 

 

 

 

More articles by:

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.

Weekend Edition
May 18, 2018
Friday - Sunday
Andrew Levine
The Donald, Vlad, and Bibi
Robert Fisk
How Long Will We Pretend Palestinians Aren’t People?
Jeffrey St. Clair
Wild at Heart: Keeping Up With Margie Kidder
Roger Harris
Venezuela on the Eve of Presidential Elections: The US Empire Isn’t Sitting by Idly
Michael Slager
Criminalizing Victims: the Fate of Honduran Refugees 
John Laforge
Don’t Call It an Explosion: Gaseous Ignition Events with Radioactive Waste
Carlo Filice
The First “Fake News” Story (or, What the Serpent Would Have Said)
Dave Lindorff
Israel Crosses a Line as IDF Snipers Murder Unarmed Protesters in the Ghetto of Gaza
Gary Leupp
The McCain Cult
Robert Fantina
What’s Wrong With the United States?
Jill Richardson
The Lesson I Learned Growing Up Jewish
David Orenstein
A Call to Secular Humanist Resistance
W. T. Whitney
The U.S. Role in Removing a Revolutionary and in Restoring War to Colombia
Rev. William Alberts
The Danger of Praying Truth to Power
Alan Macleod
A Primer on the Venezuelan Elections
John W. Whitehead
The Age of Petty Tyrannies
Franklin Lamb
Have Recent Events Sounded the Death Knell for Iran’s Regional Project?
Brian Saady
How the “Cocaine Mitch” Saga Deflected the Spotlight on Corruption
David Swanson
Tim Kaine’s War Scam Hits a Speed Bump
Norah Vawter
Pipeline Outrage is a Human Issue, Not a Political Issue
Mel Gurtov
Who’s to Blame If the US-North Korea Summit Isn’t Held?
Patrick Bobilin
When Outrage is Capital
Jessicah Pierre
The Moral Revolution America Needs
Binoy Kampmark
Big Dead Place: Remembering Antarctica
John Carroll Md
What Does It Mean to be a Physician Advocate in Haiti?
George Ochenski
Saving Sage Grouse: Another Collaborative Failure
Sam Husseini
To the US Government, Israel is, Again, Totally Off The Hook
Brian Wakamo
Sick of Shady Banks? Get a Loan from the Post Office!
Colin Todhunter
Dangerous Liaison: Industrial Agriculture and the Reductionist Mindset
Ralph Nader
Trump: Making America Dread Again
George Capaccio
Bloody Monday, Every Day of the Week
Barbara Nimri Aziz
Swing Status, Be Gone
Samantha Krop
Questioning Our Declaration on Human Rights
Morna McDermott
Classrooms, Not Computers: Stop Educating for Profit
Patrick Walker
Today’s Poor People’s Campaign: Too Important Not to Criticize
Julia Stein
Wrestling With Zionism
Clark T. Scott
The Exceptional President
Barry Barnett
The Family of Nations Needs to Stand Up to the US  
Robert Koehler
Two Prongs of a Pitchfork
Bruce Raynor
In an Age of Fake News, Journalists Should be Activists for Truth
Max Parry
The U.S. Won’t Say ‘Genocide’ But Cares About Armenian Democracy?
William Gudal
The History of Israel on One Page
Robert Jensen
Neither cis nor TERF
Louis Proyect
Faith or Action in a World Hurtling Toward Oblivion?
David Yearsley
The Ubiquitous Mr. Desplat
FacebookTwitterGoogle+RedditEmail