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Another Phony Employment Report

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Headlined to H2 10/5/12

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Cross-posted from Paul Craig Roberts



October 5. Today's employment report from the Bureau of Labor Statistics shows 114,000 new jobs in September and a drop in the rate of unemployment from 8.1% to 7.8%. As 114,000 new jobs are not sufficient to stay even with population growth, the drop in the unemployment rate is the result of not counting discouraged workers who are defined away as "not in the labor force."

According to the BLS, "In September, 2.5 million persons were marginally attached to the labor force." These individuals "wanted and were available for work," but "they were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey."

In other words, 2.5 million unemployed Americans were not counted as unemployed.

The stock market rose on the phony good news. Bloomberg's headline: "U.S. Stocks Rise as Unemployment Rate Unexpectedly Drops."

A truer picture of the dire employment situation is provided by the 600,000 rise over the previous month in involuntary part-time workers. According to the BLS, "These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job."

Turning to the 114,000 new jobs, once again the jobs are concentrated in lowly paid domestic service jobs that cannot be offshored. Manufacturing jobs declined by 16,000.

As has been the case for a decade, two categories -- health care and social assistance (primarily ambulatory health care services) and waitresses and bartenders account for 53% of the new jobs. The BLS never ceases to find ever growing employment of people in restaurants and bars despite the rising dependence of the US population on food stamps. The elderly are rising as a percentage of the American population, but I sometimes wonder if employment in ambulatory health care services is rising faster than the elderly population. Whether these reported jobs are real, I do not know.

The rest of the new jobs were accounted for by retail trade, transportation and warehousing, financial activities (primarily credit intermediation), professional and business services (primarily administrative and waste services), and state government education, where the 13,600 reported new jobs seem odd in light of the teacher layoffs and rise in classroom size.

The high-tech jobs that economists promised would be our reward for offshoring American manufacturing jobs and tradeable professional services, such as software engineering and IT, have never materialized. "The New Economy" was just another hoax, like "Iraqi weapons of mass destruction" and "Iranian nukes."

While employment falters, the consumer price index (CPI-U) in August increased 0.6 percent, the largest since June 2009. If the August rate is annualized, it means bad news on the inflation front. Instead of bringing us high-tech jobs, is "the New Economy" bringing back the stagflation of the late 1970s? Time will tell.

 

http://www.paulcraigroberts.org/

Dr. Roberts was Assistant Secretary of the US Treasury for Economic Policy in the Reagan Administration. He was associate editor and columnist with the Wall Street Journal, columnist for Business Week and the Scripps Howard News Service. He is a contributing editor to Gerald Celente's Trends Journal. He has had numerous university appointments. His book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is available here. His latest book,  How America Was Lost, has just been released and can be ordered here.

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Going after small businesses, babysitters, carpent... by Steven G. Erickson on Friday, Oct 5, 2012 at 6:16:26 PM
Unfortunately this rings true. We can expect the w... by Ernie Messerschmidt on Friday, Oct 5, 2012 at 11:51:19 PM
has been going on since WHITE Columbus landed and ... by Lester Shepherd on Saturday, Oct 6, 2012 at 10:49:56 AM
Is the worst system, only there is none better.... by BFalcon on Sunday, Oct 7, 2012 at 2:57:48 AM
UR absolutely ryt. If you have the time you might ... by Robert Bostick on Sunday, Oct 7, 2012 at 10:50:54 AM
Impoverish the general public. Those who have mone... by Jack Flanders on Saturday, Oct 6, 2012 at 11:13:25 AM
Are in your head only.... by BFalcon on Sunday, Oct 7, 2012 at 2:58:51 AM
Economic genocide of the worthless eaters is the n... by Robert Bostick on Sunday, Oct 7, 2012 at 11:06:28 AM
...not only about how the official unemployment ra... by frang on Saturday, Oct 6, 2012 at 1:57:00 PM
He is lamenting the known problems while at the sa... by BFalcon on Sunday, Oct 7, 2012 at 3:10:28 AM
Really hates Obama and our progress.Too bad, my fr... by BFalcon on Saturday, Oct 6, 2012 at 8:20:48 PM
Why doesn't anyone ask for creditable sources anym... by Lynne Kringler on Sunday, Oct 7, 2012 at 1:04:50 AM
That two things are true here.One good, one bad.Th... by BFalcon on Sunday, Oct 7, 2012 at 2:40:27 AM
have come up here I am or have researched. Some I ... by Lynne Kringler on Monday, Oct 8, 2012 at 5:04:34 AM
For all the research, data and thoughts. I practi... by BFalcon on Monday, Oct 8, 2012 at 8:33:20 PM
I think that there are a few things at work her... by Lynne Kringler on Tuesday, Oct 9, 2012 at 2:29:03 AM