Share on Google Plus Share on Twitter Share on Facebook 6 Share on LinkedIn Share on PInterest Share on Fark! Share on Reddit Share on StumbleUpon Tell A Friend 7 (13 Shares)  
Printer Friendly Page Save As Favorite View Favorites View Stats   16 comments

OpEdNews Op Eds

Virtual Economy's Phantom Job Gains Are Based on Statistical Fraud

By (about the author)     Permalink       (Page 1 of 3 pages)
Related Topic(s): ; ; ; ; , Add Tags Add to My Group(s)

Must Read 8   Well Said 6   Valuable 5  
View Ratings | Rate It

opednews.com Headlined to H2 7/7/14

Become a Fan
  (385 fans)

Cross-posted from Paul Craig Roberts

And More Fraud Is in the Works

From youtube.com/watch?v=Ulu3SCAmeBA: The Unemployment reported rate actually excludes millions of jobless Americans.
The Unemployment reported rate actually excludes millions of jobless Americans.
(image by YouTube)


Washington can't stop lying. Don't be convinced by last Thursday's job report that it is your fault if you don't have a job. Those 288,000 jobs and 6.1% unemployment rate are more fiction than reality.

In his analysis of the June Labor Data from the Bureau of Labor Statistics, John Williams (www.ShadowStats.com) wrote that the 288,000 June jobs and 6.1% unemployment rate are "far removed from common experience and underlying reality." Payrolls were overstated by "massive, hidden shifts in seasonal adjustments," and the Birth-Death model added the usual phantom jobs.

Williams reports that "the seasonal factors are changed each and every month as part of the concurrent seasonal-adjustment process, which is tantamount to a fraud," as the changes in the seasonal factors can inflate the jobs number.

The monthly unemployment rates are not comparable, so one doesn't know whether the official U.3 rate (the headline rate that the financial press reports) went up or down. Moreover, the rate does not count discouraged workers who, unable to find a job, cease looking. To be counted among the U.3 unemployed, the person must have actively looked for work during the four weeks prior to the survey. The U.3 rate automatically declines as people who have been unable to find jobs cease trying to find one and thereby cease to be counted as unemployed.

There is a second official measure of unemployment that includes people who have been discouraged for less than one year. That rate, known as U.6, is seldom reported and is double the 6.1% rate.

Since 1994 there has been no official measure than includes discouraged people who have not looked for a job for more than a year. Including all discouraged workers produces an unemployment rate that currently stands at 23.1%, almost four times the rate that the financial press reports.

What you can take away from this is the opposite of what the presstitute media would have you believe. The measured rate of unemployment can decline simply because large numbers of the unemployed become discouraged workers, cease looking for work, and cease to be counted in the U.3 and U.6 measures of the unemployment rate.

The decline in the employment-population ratio from 63% prior to the 2008 downturn to 59% today reflects the growth in discouraged workers. Indeed, the ratio has not recovered its previous level during the alleged recovery, an indication that the recovery is an illusion created by the understated measure of inflation that is used to deflate nominal GDP growth.

Another indication that there has been no recovery is that Sentier Research's index of real median household income continued to decline for two years after the alleged recovery began in June 2009. There has been a slight upturn in real median household income since June 2011, but income remains far below the pre-recession level.

The Birth-Death model adds an average of 62,000 jobs to the reported payroll jobs numbers each month. This arbitrary boost to the payroll jobs numbers is in addition to the Bureau of Labor Statistics' underlying assumption that unreported jobs lost to business failures are matched by unreported new jobs from new business startups, an assumption that does not well fit an economy that fell into recession and is unable to recover.

John Williams concludes that in current BLS reporting, "the aggregate average overstatement of employment change easily exceeds 200,000 jobs per month."

In other words, the economy did not gain 288,000 new jobs last month. But let's assume the economy did gain 288,000 jobs and examine where the claimed jobs are reported to be.

Of the alleged 288,000 new jobs, 16,000, or 5.5 percent are in manufacturing, which is not very promising for engineers and blue collar workers. Growth in goods-producing jobs has almost disappeared from the US economy. As explained below, to alter this problem the government is going to change definitions in order to artificially inflate manufacturing jobs.

In June private services account for 82 percent of the supposed new jobs. The jobs are found mainly in non-tradable domestic services that pay little and cannot be exported to help to close the large US trade deficit.

Wholesale and retail trade account for 55,300 jobs. Do you believe sales are this strong when retailers are closing stores and when shopping malls are closing?

Insurance (most likely the paperwork of Obamacare) contributed 8,500 jobs.

Next Page  1  |  2  |  3

 

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.

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon

Go To Commenting
The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Writers Guidelines

Contact Author Contact Editor View Authors' Articles

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Libya - The DC/NATO Agenda And The Next Great War

The Road to Armageddon

American Job Loss Is Permanent

A Story...The Last Whistleblower

Pakistan TV Report Contradicts US Claim of Bin Laden's Death

Comments

The time limit for entering new comments on this article has expired.

This limit can be removed. Our paid membership program is designed to give you many benefits, such as removing this time limit. To learn more, please click here.

Comments: Expand   Shrink   Hide  
9 people are discussing this page, with 16 comments
To view all comments:
Expand Comments
(Or you can set your preferences to show all comments, always)

One more time thank you Dr. Roberts for bringing a... by Hosea McAdoo on Monday, Jul 7, 2014 at 10:20:49 AM
"The corruption in present day America is total."O... by Patricia Gray on Monday, Jul 7, 2014 at 2:17:48 PM
"The corruption in present-day America is total,... by Steve Hudson on Monday, Jul 7, 2014 at 6:04:05 PM
Sorry but the pendulum swinging in the other direc... by urb musak on Monday, Jul 7, 2014 at 9:23:53 PM
Steve, I appreciate your endorsement of myself and... by Paul Craig Roberts on Tuesday, Jul 8, 2014 at 7:35:44 AM
Amen! ... by Paul Craig Roberts on Monday, Jul 7, 2014 at 7:03:56 PM
This Article's Headline Introduction "Corruption ... by Hubert Steed on Monday, Jul 7, 2014 at 7:38:04 PM
Everywhere you turn people seem desperate to take ... by Pal Palsimon on Monday, Jul 7, 2014 at 9:44:23 PM
Sadly humans are parasites on the Earth and humani... by Hosea McAdoo on Tuesday, Jul 8, 2014 at 4:24:14 AM
Pal, while I generally agree with your assessment ... by Steve Hudson on Tuesday, Jul 8, 2014 at 11:48:24 AM
Thanks for link. I have already posted a link to t... by Pal Palsimon on Sunday, Jul 13, 2014 at 5:11:32 AM
You have been writing about the funny jobs numbers... by K V Ramani on Monday, Jul 7, 2014 at 7:43:21 PM
While the clarification may be hidden in the numbe... by Hosea McAdoo on Tuesday, Jul 8, 2014 at 4:48:11 AM
There is a graph of Unemployed and Discouraged Wor... by Rodger Malcolm Mitchell on Tuesday, Jul 8, 2014 at 3:26:22 PM
Discouraged workers are a subset of persons margin... by Rodger Malcolm Mitchell on Tuesday, Jul 8, 2014 at 3:28:56 PM
Good video about redefining the data used for econ... by Pal Palsimon on Saturday, Jul 12, 2014 at 6:01:05 AM