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Monday, October 15, 2012

Economic Funny Numbers


Anyone who was astonished to read the unemployment numbers had mysteriously dropped in September, should read this article by Bob Livingston. He nails down  the issue  and points out how in Washington, numbers, like their mistresses, need to be massaged. It has been going on for years and anyone who takes the numbers as gospel does not understand how our government works (or does not work.)

We expect another dose of funny numbers coming out the first week of November, just in front of the election.  We would expect another .3% drop, down to 7.5%. Now, that will not be the 6.0% we suggested earlier this year, however, the government still is dropping the numbers in front of the election which was our larger point. 

It also shows that if the government has to manipulate the numbers, things must be much worse than we suspect.  If Shadowstats.com is correct and the "real" unemployment is greater than 22%, we do have a Depression-like statistic. This in normal times would be a major political problem for the sitting President, however, due to the memory problems of the US populace, it does not seem to be.

One reason for this lack of clarity would be how people are paid now when they are no longer working. The major difference between the Great Depression and the Great Recession is that we do not see the unemployed lining up to get jobs. They are getting their unemployment or disability check at home, they are working at part time jobs, or taking money under the table for doing work. We do not see them, so it is if they do not exist!

We wonder how many of those who are either unemployed or underemployed will vote for this President. Will Romney's statement on the 47% be accurate? Three weeks from now, we will know.

Conservative Tom


Phony Numbers, Phony Recovery, Phony President

October 15, 2012 by  
Phony Numbers, Phony Recovery, Phony President
SPECIAL
Mark Twain once wrote, “There are three kinds of lies: lies, damned lies and statistics.” The phony jobs numbers issued last week and used by the phony President to tout a phony recovery are typical of the lies, damned lies and statistics spouted out daily by the political elites.
The elites walking the halls of power — the true 1 percent — are greedy and murderous psychopaths. They care nothing for their “subjects” and seek only more power, more money and more aggrandizement. They readily lie, cheat, steal and kill to achieve their goals.
The 7.8 percent unemployment number is a manipulated and meaningless figure. The Bureau of Labor Statistics cooks the books each month by using data it terms as “seasonally adjusted.” But this adjustment changes from month to month, and the BLS will not disclose what the adjustments are or how they are arrived at. It also does not tell the public that those factors change month to month.
John Williams at Shadowstats.com explains: “[T]he BLS knowingly has been preparing the seasonally-adjusted headline unemployment numbers on an inconsistent and non-comparable basis for some time. The September number was prepared using a different set of season factors than was used in coming up with the August number. The reporting difference can be large, when proper consistent month-to-month changes are used.”
In addition to applying nebulous and ever-changing seasonal adjustments, the numbers are based in part on information compiled by census workers conducting telephone surveys and home visits. They take monthly samples of 50,000 to 60,000 households in 31 States and the District of Columbia. Their criteria are ambiguous. For instance, the range for part-time work falls between one hour and 34 hours per week. “So if an out-of-work accountant tells a census worker, ‘I got one baby-sitting job this week just to cover my kid’s bus fare, but I haven’t been able to find anything else,’ this can be considered a part-time job,” writes Jack Welch in an op-ed in The Wall Street Journal.
Because of the subjective and open-ended nature of some responses, the opportunity for data manipulation is legion. There is also a motive for data manipulation. Government workers conducting these tests and compiling the data are members of the American Federation of Government Employees, which is part of the AFL-CIO. Unions are in the tank for the Democratic Party in general and President Barack Obama in particular.
Welch came under fire last week after he tweeted that he was skeptical of the sudden three-tenths of 1 percent drop in unemployment on the heels of Obama’s dismal debate performance.
As an aside, that debate revealed what I and many others have known for some time: Obama is a phony. He’s an empty suit (or chair) without the capacity for intelligent discussion beyond standard rote Marxist talking points, unless one of his masters has a hand up the back of his shirt in the form of a teleprompter. He has demonstrated this time and again through his choice of softball and heavily scripted interviews and the way he has responded as a petulant child to what few challenges he has received from the rare tough interviewer or the occasional Republican politician.
One of Welch’s critics last week was Austan Goolsbee, former chairman of the Obama regime’s Council of Economic Advisers. Demonstrating that, for the elites, history begins today and yesterday is irrelevant, Goolsbee conveniently forgets that just nine years ago he accused the George W. Bush Administration of cooking up phony unemployment numbers. In an op-ed piece for The New York Times published Nov. 30, 2003, Goolsbee wrote:
The government reported that annual unemployment during this recession peaked at only around 6 percent, compared with more than 7 percent in 1992 and more than 9 percent in 1982. But the unemployment rate has been low only because government programs, especially Social Security disability, have effectively been buying people off the unemployment rolls and reclassifying them as “not in the labor force.”
In other words, the government has cooked the books. It has been a more subtle manipulation than the one during the Ronald Reagan Administration, when people serving in the military were reclassified from “not in the labor force” to “employed” in order to reduce the unemployment rate. Nonetheless, the impact has been the same.
Under Obama, disability roles have risen in excess of 3.6 million since 2008, meaning Obama is using the same method of concealing true unemployment as the hated Bush.
According to Shadowstats, data manipulation has its roots in the Richard Nixon Administration. Williams writes that Nixon proposed that the BLS release each month one unemployment number — the one that was most favorable to the Administration — but not reveal whether it was the seasonally adjusted or unadjusted number. While there is no evidence this tactic was ever used, it demonstrates the mindset in Washington.
Even if one takes the official 7.8 percent number and BLS statistics at face value, they’re still nothing to crow about. Besides, the 7.8 percent number will not remain static. The BLS revises the data regularly and won’t issue a final number for the month until January, long after the election and when the September number is no longer relevant. The September number could change four or five times before January.
According to the BLS, total nonfarm payroll employment increased by only 114,000 in September. That’s not enough to keep up with population growth. It’s also 32,000 fewer jobs than the monthly average for this year, and 39,000 fewer jobs than the monthly average in 2011. Manufacturing jobs declined by 16,000 and overall have been unchanged since April. Yet we are to believe unemployment dropped?
The number of people employed part-time for economic reasons (that is they took part-time work because their hours were cut back or it was the only work available to them) rose from 8 million to 8.6 million. Another 802,000 dropped from the labor force and weren’t counted in the jobless data, and they became part of the 2.5 million considered marginally attached to the labor force because they “wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.”
Despite the rah-rah chanting of Obamaphiles, the truth is the number of people employed is near where it was in 2000 and well below where it was at its 2007 pre-recession peak. Actual unemployment, according to Shadowstats, exceeds 22 percent.
The Feds are likewise manipulating the inflation data. Called the Consumer Price Index (CPI), it is a measure of inflation based on the cost of a basket of goods. But the contents of the basket changes from time to time. Politicians like this because it is used to determine, among other things, the annual cost-of-living adjustments for Social Security. By manipulating the contents of the basket of goods, rising inflation can be masked and Social Security adjustments can be kept artificially low.
Using pre-Bill Clinton CPI methodology (that is, methodology employed until 1990), CPI inflation in August (September numbers are due out tomorrow) was 5.6 percent. Using methodology employed in 1980, CPI inflation in August was 9.3 percent, according to Shadowstats.
This is all part of the ongoing war on American seniors and savers being waged by the psychopaths in Washington.

7 comments:

  1. This guy doesn't have a clue why the data are seasonally adjusted. The idea is to factor out the seasonally stable things we know will affect the unemployment rates about the same time each year, and BLS uses longitudinal data to estimate the magnitude of these seasonal impacts. This gives a more realistic picture of the underlying trends.

    It really did not have the effect of "cooking the books" in September, if that were the intent of BLS -- which it is not. In fact, the seasonally unadjusted rate in September was LOWER than the seasonally adjusted rate. Seasonally adjusting in September raised the official unemployment rate by 0.2%. Like Welch and the other guy, this guy has zero evidence that BLS rigged the data, or ever has.

    Also, as he admits (and I told you earlier), if BLS wanted to paint a rosy picture in September, they would not have reported 16,000 manufacturing jobs lost and only a 114,000 jobs increase. Both are weak numbers.

    --David

    ReplyDelete
  2. David, You continue to believe the government spin! Are you really that gullible? The BLS is a government agency which like all government agencies work for the President. When the office of the President calls and asks you come to the White House and when you arrive, the President asks you to change the way unemployment is calculated, you as a good government employee will march off and follow the instructions.

    That is reality.

    ReplyDelete
  3. That's just not true. The BLS commissioner serves a 4-yr. term and is not replaced by an incoming president. It is not a political office,and there is a firewall between the BLS and the rest of the government. Many, many people are involved in compiling the data. It would require a massive conspiracy (including Republicans) for Obama to do what you suggest. It can't happen, and if it did, somebody would leak it from the inside. There would be no way to keep it secret. As I said, there is zero evidence to support this conspiracy theory and, if they wanted to rig the data, they sure as heck could have produced much better-looking numbers for September.


    "I think it would be impossible to really manipulate the numbers," said Keith Hall, who served from 2008 to 2012 as commissioner of the independent statistical agency, which produces the report. "Certainly, it would be impossible to manipulate the numbers and not be found out."
    After the BLS reported Friday that the unemployment rate in September dropped to 7.8% from 8.1%, former General Electric Chief Executive Jack Welch charged that the White House manipulated the number to distract from President Obama's debate performance this week....Hall, who was appointed by former President George W. Bush and served through much of the Obama administration, said BLS commissioner is a nonpolitical position. The commissioner serves a four-year term and is not replaced by an incoming president, as the heads of Cabinet departments and other agencies are.

    "I feel like I’m a certified economic geek rather than a political person," said Hall, who is a senior research fellow at the Mercatus Center at George Mason University.

    During his four years as commissioner of the BLS, which is part of the Labor Department, Hall said he was never asked by the Bush or Obama White House to change any data.

    http://www.latimes.com/business/money/la-fi-mo-welch-unemployment-manipulation-labor-statistics-20121005,0,7387690.story

    And this is why you are not going to come anywhere close to winning our little bet. It is you, not I, who is gullible for believing this nonsense with zero evidence to support it.

    --David

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  4. David you forgot to mention that somehow in the calculations they forgot to include California! Mistake, hardly!

    As far as Mr. Hall goes, he is not there now, so the quote is meaningless.

    ReplyDelete
  5. By the way who is the new BLS chief? Do they even have one? I see one was nominated, but can find no where in my brief checking that she was approved.

    ReplyDelete
  6. The acting commissioner of the BLS is John M. Galvin. He has been working at BLS for the last 34 years. The guy in charge of overseeing the preparation of the unemployment report is Tom Nardone. He has been working at BLS for the last 36 years. These guys are career bureaucrats, not Obama appointees. For all we know, they may both be Republicans!

    Similarly, I find it odd that you dismiss Mr. Hall (a Bush appointee) who held the position 2008-2012. His informed opinion is that it would be virtually impossible. I can't imagine another person in the United States who is more familiar with the workings of the BLS.

    As for California, their unemployment rate dropped 0.4% from August to September. That is more than the national average reported 0.3%.

    --David

    ReplyDelete
  7. David, you keep drinking the "funny water!" If someone says something,you believe it. I am skeptical of all government workers. Who says that Mr. Hall, was also manipulating the data and does not want to admit it for fear of retribution? Ever thought of that?

    As to California, isn't it a bit incompetent to leave out the largest state economy? If they can leave out California, what else could they leave out? It is time to bit skeptical!

    ReplyDelete

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