|
Post by unlawflcombatnt on May 9, 2007 17:50:51 GMT -6
Last Friday the Payroll Employment numbers showed an increase of only 88,000 for the month of April. This was considerably less than the 115,000 predicted, and much less than the 150,000 needed to keep pace with labor force growth. However, even the pitiful increase of 88 K is a gross distortion of facts. In reality, total employment declined by -468,000 in the month of April. Total, seasonally-adjusted employment for April is 140,000 less than December 2006. (Note that both numbers are seasonally adjusted.) This can be seen from the chart from the Bureau of Labor Statistics below. (Key numbers are underlined in red.) In addition to the total employment decline, real weekly wages have also been declining since October of 2006. March's average real weekly earnings of $279.47 (in 1982 dollars) were -2.4% less than October 2006's $286.32/week. This can be seen from the chart below. The employment and wage growth touted by the Corporate media are non-existent. They've sliced and diced numbers, reporting only those that are convenient to their talking points and bullish propaganda. The reality is that total U.S. employment is declining, and that real weekly earnings have been declining since October 2006. This information is easily verifiable by the published statistics from the United States Dept. of Labor, Bureau of Labor Statistics.
|
|
|
Post by Ryan on May 9, 2007 21:02:39 GMT -6
So why is there such a huge disparity between the household survey and the establishment survey? One shows a loss of 468,000 jobs where as the other one shows a GAIN of 88,000. This represents a range of 556,000. This is a significant number don't you think? Why is one survey favored over the other?
|
|
|
Post by unlawflcombatnt on May 10, 2007 5:32:50 GMT -6
The Payroll Employment survey is usually favored over the Household Survey because it covers a larger number of employment sites (400,000 vs. 50,000), and it is based on tangible statistics (like payrolls), instead of surveys that simply ask whether the person was employed or not.
The +88,000 Payroll Survey usually is considered the more reliable number. However, when the Bush-ites have a better Household Survey number, they espouse that instead of the Payroll Survey.
In theory, however, the Total Employment number is what's most important, as it includes all employed Americans. Thus it's hard to claim that employment is "increasing" when the total number of employed Americans is decreasing. It's even more difficult to make that claim when real wages are also declining, suggesting a declining labor demand (causing less Americans to be employed).
I think the most important comparison is between December 2006 and April 2007. Since this is a seasonally-adjusted number, it should take into account seasonal variation. And since December, total employment has declined roughly 140,000. That's not a "tight" labor market. It's a declining labor market. It's a labor market with a lot of "slack."
|
|
|
Post by unlawflcombatnt on May 10, 2007 17:40:25 GMT -6
Here's another take on the April Payroll Employment report from naked capitalism. The author maintains that much of the alleged employment increase is through "imputation." In other words, it is estimated from historical job creation patterns, and not actually measured. The method of this "imputation" (falsification?) is described by Bureau of Labor Statistics under CES Net Birth/Death Model. I still don't fully understand this calculation. However, what I do understand is that 317,000 jobs were added to the April total as a result. And this addition of +317,000 jobs is the largest addition ever. In the previous month the addition was only +128,000. In February it was only +118,000. Thus the April addition was almost 3 times as large as in the previous 2 months. And even with the questionable addition of +317,000 jobs, the total came out to only +88,000. If this phantom addition had only been the +128,000 it had been the previous month, the April Payroll Employment Total would have been -101,000 jobs. In other words, Payroll Employment would have DECLINED 101,000 in April. .
|
|
|
Post by judes on May 29, 2007 19:14:44 GMT -6
It's just so hard to buy into the strong job growth numbers that kept getting spun, especially when you see and hear of people all around you every day losing their jobs. Here is a good article that sheds a better light on the situation. It's interesting to note the calculation for job growth was changed in 2001 to include "birth/death rate" some mysterious fudge factor to make things look much better than reality. Why the change? usmarket.seekingalpha.com/article/36570?source=d_email&u=72598"As Philippa and Doug explain, this series reports detailed gross job gains and losses in the private sector based on nearly complete coverage "of the employment universe provided by the unemployment insurance system." More painstaking than the familiar monthly surveys of employment, the tally is published with a lag of several quarters; the one released earlier this month, for example, was for the third quarter of 2006. What it showed, though, was eye-opening.
"Thus, compared with a gain for the quarter of 442,000 jobs reported in the so-called establishment survey, the Business Employment Dynamics, or BED, reckoning was a scant 19,000 additions. In manufacturing, the 9,000 jobs lost according to the payroll figures balloon into a loss of 95,000 jobs in the BED data; the improbable 20,000 additions in construction (think: housing) turns into a loss of 77,000 by BED's measure; the 507,000 gain in private services shrinks to 108,00. And so it goes. Or, more accurately, so goes the job mirage.
One likely culprit, Philippa and Doug suggest, is that curious concoction known as the "birth/death" model used by the Bureau of Labor Statistics to estimate the gains/losses in jobs from the launching and demise of businesses. Thanks to this voodoo calculation, 156,000 were added in last year's third quarter and a hefty 388,000 in the opening four months of this year. Nice going, indeed, considering that first-quarter GDP growth probably, when the dust clears, will have fallen below 1%, and April was a punk month."
|
|
|
Post by judes on May 29, 2007 19:34:36 GMT -6
Another interesting article on the job "creation" measure. www.prudentbear.com/articles/show/2023 "Our government “prints up jobs out of thin air” the same way the Federal Reserve prints up money. To manufacture jobs, The Bureau of Labor Statistics uses their very own Net Birth/Death computer model (see CES Net Birth/Death Model for job creation at . The idea behind the model is simple: Because small firms are always failing and starting up and it takes a few months for them to report on the payroll survey, an estimate is needed for the new jobs created. So, back when the economy was recovering, the Net Birth/Death Computer Model added jobs that had very likely been created. Their methodology goes like this: ■ The Net Birth/Death model first creates jobs on a non-seasonally adjusted basis; ■ The computer-generated jobs are then added to the jobs actually reported by the payroll survey for the month; ■ The new total is then seasonally adjusted which creates the reported monthly unemployment number announced to the public. It’s only much later that ongoing payroll surveys confirm or rebut the estimated job creation. I realize the above may sound confusing, but it’s actually meant to. This is economic propaganda created by our very own government! This false creation of jobs is not that much different from the over-stated earnings created by the executives at Enron that brought the company down. You may now be wondering how many jobs in 2007 have simply been made up and reported by the computer model so far? Well, in February there were 118,000 jobs added; in March, there were 128,000; and in April, 317,000. That amounts to 563,000 in the last three months. Without the computer, the payroll survey would have shown a loss of jobs over the last three months. ...............................
Where is employment going? American factories have shed thousands and thousands of jobs, and new factories (or existing ones) are moving to Asia where labor is cheaper. If you thought this trend was over, pick up the newspaper tomorrow and read about all of the big corporate mergers and private equity firms buying public companies. Yes, this buyout activity pushes stock prices up at first, but don’t be fooled. These private equity deals and mergers usually mean that the buyer has only two things in mind: 1) to cut competition and raise prices; and 2) to slash the number of employees, gut healthcare benefits, and rob the pension plans. Is it simply my imagination or are mass layoffs and worker buyouts on the rise? I firmly believe that the stock market is up only because of easy money, stock buy-backs, and the leveraging away of our country’s future. "Read the whole article for more in depth analysis, it is pretty interesting.
|
|
|
Post by unlawflcombatnt on May 30, 2007 3:08:36 GMT -6
Judes,
I've seen a 1-page explanation of this from the BLS in the past. The explanation is so bizarre that it ought to be on the SciFi channel. With the last monthly employment report, which totaled only 88,000 jobs, the "imputed" jobs from this birth/death model was over 300,000 jobs. (which means the actual recorded job numbers were negative by over 200,000.) In fact, the "imputed" number added was more than the combined total number of imputed jobs for the previous 2 months. It was close to the highest number of "imputed" jobs on record.
This type of connivery just reminds us that even the so-called payroll employment report is based not only on facts, but also on conjecture (or fabrication). And in this case, the conjecture simply defies logic, by adding a near record high of over 300,000 jobs, while the economy is clearly slowing down.
Many Federal statistics now are more a product of creativity, than they are of factual recording of statistics. This birth/death model is a classic example of the government's "creativity" when reporting statistics.
|
|
|
Post by blueneck on May 30, 2007 4:22:07 GMT -6
And yet NAM and the C of C continue on with their so called "labor shortage" taking points and pushes for illegal immigrant amnesty and expanison of H1B visas - when the numbers clearly show that there isn't enough job growth to keep legal citizens gainfully employed.
This just does not compute.
|
|
|
Post by unlawflcombatnt on May 30, 2007 19:37:27 GMT -6
In reading some good commentary today from nakedcapitalism, it was noted that the birth/death adjustments to BLS employment numbers didn't take full effect until 2001. (Just in time for the Bush "Deceptocracy"). Below is a copy of the additional jobs added to the payroll employment report by the birth/death model. This actually comes from the U.S. Bureau of Labor Statistics. This model added 964,000 jobs to the calculated job total in 2006, it added 865,000 in 2005, and 836,000 in 2004. The numbers added for this year are not widely available. However, the number added to the April's total payroll employment number was 317,000, the highest since January 2004. And with the addition of this "imputed" employment number, the total number of jobs created was only 88,000. Which means the number of jobs actually counted by the BLS was -229,000. Again, here as elsewhere, our current economic "growth" is simply a fabrication by the government. Of the total number of jobs that were actually counted for the month of April, the number DECLINED by 229,000. Little wonder real wages are declining.
|
|
|
Post by unlawflcombatnt on May 30, 2007 22:55:04 GMT -6
Here is another article discussing the business birth/death addition rate to the employment total. This is from an article by Greg Ip, titled Overestimating Jobs Growth?" Are government statisticians missing a turn for the worse in the jobs market? Goldman Sachs suspects so.
The firm’s chief U.S. economist, Jan Hatzius, argues in a report that the Bureau of Labor Statistics might be overestimating the number of jobs created in new firms. “Employment growth may already have slowed by considerably more than suggested by the official nonfarm payroll figures,” Hatzius says. One sign: quarterly unemployment insurance records, which are used for annual benchmark revisions to payrolls, suggest actual employment was already running behind the official tally by last fall.
Here’s the background: Each month the BLS surveys workplaces that employ about third of all nonfarm workers, and it estimates the rest, making revisions over the next two months as more complete information comes in. But it has no good way of measuring jobs created by new firms, since its monthly surveys have no record of their existence. Instead, it fills in the gap with a “birth/death” model that uses historic patterns to predict how many jobs were created by new firms or destroyed by firms going out of business. Once a year, those estimates are replaced with hard data from unemployment insurance records.
Hatzius notes that by the BLS’s own admission, the birth/death model has trouble catching turning points. He notes that because it is based on history, it tends to adjust to the most recent trend. In the initial years of the expansion, the model underestimated job growth, most spectacularly in the year through March 2006, for which there was a very large upward revision later on.
That pattern has now been incorporated into the model. So far this year, it has added an average of 113,000 jobs per month, compared with 88,000 throughout 2006 and 68,000 in 2005. Hatzius suspects it may have gone too far and is now overestimating job growth, but we won’t know it until preliminary benchmark revisions are announced this fall."
|
|