Liberty on Tap since 1984
The fudged January BLS 8.3% unemployment report leaves a sour taste
Newspapers throughout the nation, including those in Chicagoland, likewise heralded and celebrated the addition of 243,000 jobs which most likely caused the White House staff to do victory laps and cartwheels.
But might all the jubilation over the lowered BLS January 8.3% unemployment rate not only be premature and short-lived, but a declaration that qualifies the 8/3% unemployment rate as one of the greatest scams of this past decade (another is Global Warming) whose purpose it was to make Obama's policies appear successful in creating jobs?
Although the process used by the Bureau of Labor Statistics to determine unemployment data is not easily understood, tedious research did reveal the truth behind the January jobs report. Incidentally, the fudged report did result in boosting President Obama's approval rating.
Herein lies the dichotomy: The worse the economy gets the better it looks for the Obama administration because of the way unemployment numbers are gathered and counted.
How could it be that in one month people dropping out of the labor force exploded by an unprecedented record of 1.2 million?
January might have netted a whopping number of 243,000 jobs, but an even larger number left the labor force, 1,753,000 all total, bringing the percentage of the total working population without jobs in January to 37.7%. At the same time the civilian labor force dropped to 63.7%, a 30-year low.
Facts do speak the truth: Nearly half of the available labor pool in January was not included in the unemployment data gathered by the Labor Bureau. Instead, these individuals were relegated to governmental statistical oblivion and dropped some where along the wayside.
How is this so? The Bureau of Labor came up with the 8.3% unemployment rate because of figures they had obtained from Americans who were either employed or who, although unemployed, were still looking for work. Not counted were the 2.8 million individuals who wanted and were available for work, who had looked for a job sometime in 2011, but who had not searched for work in the 4 weeks preceding the Bureau of Labor survey.
In other words, because the denominator (participants in the job market) shrank markedly in January, a reduction resulted in the measured unemployment rate.
What has happened to the estimated 1,752,000 workers who were invisible and forgotten by government in January.
Many of the same individuals are likely still without jobs and without hope of finding one, which has resulted in less money to spend and serious cash flow problems, at a time when prices are also going up.
And what about the much exalted January job gain of 243,000? Fact: According to the traditionally optimistic Congressional Budget Office, "The U.S. in 2011 had to create 121,000 jobs per month just to keep pace with population growth. This number will decline modestly over the next several years, but still averages 106,000 per month over the next 5 years. And the kicker is that this number does not account for the 3 million people who are not currently in the workforce that the CBO defines as Potential Workforce. Currently the labor participation rate is the lowest in history when pitted against this nation's working-age population. http://www.zerohedge.com/article/monthly-non-farm-payrolls-have-grow-121000-month-2011-just-keep-population-growth
The Labor Department's Birth/Death model must be examined as part of the equation it employs to determine job creation. A flawed model at best, the Birth/Death model is suppose to compensate for the inability of the government to get good information on the number of new businesses created every month, which presumably adds jobs.
As reported by Paul Craig Roberts on Friday, February 7th in his article, The January Jobs Are Statistical Artifacts, the Bureau of Labor Statistics added 48,000 new jobs per month in 2011 to its payroll employment report based on its birth/death model and seasonable adjustments without regard to an economy yet to rebound from a deep recession.
As such the Labor Department's Birth/Death model added 580,000 jobs to the reported jobs numbers. To further complicate the situtation, it is impossible to ascertain how many of the January jobs were the result of the Bureau's Birth/Death model application in 2011.
Stated by Roberts: "In a prolonged downturn, seasonal adjustments and the birth/death model produce nonexistent employment."
https://www.google.com/search?q=The+January+Jobs+ARe+Statistical+Ar...
The Bureau's Birth/Death expectation-adjusted basis model might be applied according in real life. Imagine rumors that 100 employees were going to be laid off at Pioneer Press publications or your place of business. Instead, management decided to fire only 50 employees, but, adjusting for expectation, 50 employees didn't get fired. Can it then be said that 50 jobs were created by not firing the rumored 100?
Shouldn't logic be proof enough that the 8.3% unemployment rate couldn't possibly be true when. What happened is much the same as a 2011 Democratic Mediscare Ad that accused Paul Ryan of pushing "Grandma Off a Cliff" if he didn't support Obamacare. www.weeklystandard.com/.../new-democratic-mediscare-ad-paul-rya...
A recent CBO report counters the Labor Department's rosy, one-month jobs report with its own prediction that he National Deficit will grow at least $1.08 trillion this year and that the actual unemployment rate will continue increasing, not decreasing http://www.cbo.gov/ftpdocs/108xx/doc10871/01-26-Outlook.pdf
Observing communities around and about where I live, homes are in foreclosure, stores are closing their doors or barely making it, and the unemployment picture is less than a rosy one. The national 8.3% unemployment rate certainly doesn't coincide with the evidence that is all around me, especially given the financial wreck of Illinois.
Illinois racked up yet another disastrous unemployment record in 2011. Not only did Illinois place more unemployed Illinoisans on its unemployment rolls than did any other state, but Illinois's dip was larger than those experienced by North Carolina, Hawaii, and Mississippi, leaving Illinois scraping the battle of the barrel in job creation. http://illinoisreview.typepad.com/illinoisreview/2012/01/illinois-s......
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Gray and Christmas, an executive outplacement firm that does job surveys, reported that in the month of January job layoffs increased by 28%.
http://money.cnn.com/2012/02/02/news/economy/jobs_challenger/index.htm
A Gallup survey on business employment likewise indicted a rise in unemployment at the start 2012.
http://www.gallup.com/poll/152432/Unemployment-January.aspx
The government has gotten very good at focusing attention on only one part of the story that tells of the supposedly 243,000 jobs created in January -- to which the media responds hook, line and sinker and without hesitation, minus fact checking -- and instead latched on to the 1,752,000 individuals who have gone to Labor Department purgatory.
The actual employment figure hovers between 10 and 15 percent.
As noted in the The Heritage Foundation Member Briefing of February 7, 2012, The Truth Behind the January Jobs Report, by Tierra Warren:
"Unfortunately, many fiscal policies enacted by Congress have generated little job growth. A two-month extension of the payroll tax cut does little to create employment, because the duration of the tax change is seem as temporary . Even worse, businesses have the added uncertainty of the expiration of the 2001 and 2003 Bush tax cuts which will constrain hiring, along with the cost Obamacare mandates and policies that will be imposed upon businesses if Obamacare goes into effect in 2013."
Sooner or later the American people will wake up, as many have already, to the realization that the Obama administration's positive words regarding the State of the Nation are mostly words.
Instead there is anemic growth at best, with a future that looks bleak if our nation continues to accrue insurmountable debt through massive and uncontrollable spending that can only result in a failed nation, unlike what is happening to Greece and other European nations, who tried to please all by giving all more than government had at its disposal to give.
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