Is the Crowd Wrong on QE2? (Numbers "fiddling" by BLS created 200,000 phantom jobs last month)

Barron's ^ | 11/6/2010 | Alan Abelson

[Qbert]

[Snip]

THE JOBS REPORT FOR OCTOBER was released by the Bureau of Labor Statistics on Friday, and at first blush was surprisingly strong, much stronger, indeed, than expected. Payrolls expanded by 151,000 and the two previous months' were revised upward. But hold the hurrahs. The unemployment rate was stuck at 9.6%, and, toss in the underemployed and the rate remains at an elevated 17%.

Moreover, the household version of the employment picture was a real bummer, showing an employment drop of 330,000. That especially weird disparity between the household and the payroll reports made us do a double-take. Happily, the always astute Stephanie Pomboy of MacroMavens provided a quickie explanation:

"The seasonal bar which the payroll data must jump was (inexplicably and dramatically) lowered from prior Octobers."

Thus in October 2009, the BLS set the bar at 870,000 jobs, similar to the 840,000 it anticipated in October 2008. This year, by contrast, it lowered the bar to 768,000. Mumbo, jumbo, payrolls presented "an upside surprise" of 100,000.

According to John Williams at Shadow Government Statistics, the BLS' fiddling with the figures via what he calls "seasonal-factor games" actually created 200,000 phantom jobs last month. John cites such finagling as the reason his prediction of an October decline and a rise in the jobless rate was wrong. It also explains why seasonally adjusted payrolls were revised upward by 110,000 in September including 56,000 in August.

As we've observed before, those seasonal adjustments sure are magical: They can make it snow in the Sahara and be hot as blazes in the middle of winter in Siberia. 

[Qbert]

(Last section of article excerpted)

[Bean Counter]

That begs the question, what would the rates have been, had the numbers not been jiggered...??

[RWGinger]

I admit to not knowing much about this
so do I understand correctly?
this “ bar” set by the BLS means that every job over that number is a job created?

So when the bar was 870,000 in Oct 2009 and actual numbers came in at 900,000 then 30,000 jobs were created?
But by lowering the bar to 768,000 THIS oct, over a 100k below last year then every job over that lower number was a job created?

slick
a lie but slick

[updatedscreenname]

Bigger factor is companies showing older workers the door.
Some are being replaced by young new hires.

Obamacare has shifted current health care costs. Those with dependents and families are far more expensive to insure than those that are single. Also helps that new hires are starting at far less than existing employees.

The result is that unemployment goes down. Older workers start retirement and thus aren’t counted.

[RobRoy]

>>Some are being replaced by young new hires.<<

A better way to say it:

Some are being replaced by CHEAP young new hires.

[Qbert]

I believe that’s right. And that’s not the only slick move... The BLS also used the fictional “birth-death model” to overstate “job creation by 779,000 in the year that ended in March 2009. The Labor Department also revised its monthly jobs data for April through December 2009, and found the birth-death model had overstated job creation by another 405,000.”

http://www.reuters.com/article/idUSTRE61437720100205

[LibLieSlayer]

If the government says it today... it is a lie until proved otherwise.

LLS

[desertfreedom765]

A better measure of how the economy is doing is government tax receipts. The unemployment statistics can be manipulated way to easily.

The Tax receipts reflect not only how many people are working but the quality of their pay. Plus by law people are supposed to be truthful on their income tax statements.

[Atlas Sneezed]

That begs the question, what would the rates have been, had the numbers not been jiggered...??

---

It certainly raises the question, but it does not beg it.

http://en.wikipedia.org/wiki/Begs_the_question

“Begs the question” means the same as “assumes the point”

[RWGinger]

My God the POS 0dumbo and his socialist comrades must think everyone is stupid.

MSM won’t cover it but thanks to people like you and thanks to Free Republic etc more and more will see.
last Tuesday is proof

[StAnDeliver]

The reality is so severe and so ingrained now, that "fiddling" with these numbers is actually working against them, ie the alien's government is creating alienation against the alien.

But they can't help themselves -- their overpaid internal pollsters tell them to create the "illusion" of improvement; and the real truth of it is, there is no likelihood of a recovery before 2012 -- and we in the Heartland have no intention of aiding a recovery other than providing as best for our families -- until this President is defeated in 2012.

[irish_links]

“The reality is so severe and so ingrained now, that “fiddling” with these numbers is actually working against them, ie the alien’s government is creating alienation against the alien.”

I don’t know what alientation has to do with this, but the seasonally-adjusted payroll data are provided as an estimate of the net jobs created or destroyed in a given month. Economists know that the seasonal adjustments are flawed and the standard errors are wide, but they provide them anyway because this is the easiest way for the public to digest the data.

Year-over-year comparison of non-seasonally-adjusted data is the best way of evaluating payroll trends, but people who are not mathematically or economically astute have difficulty understanding them, hence the BLS publish these seasonally adjusted data and these are the numbers that the media and politcal class types focus on.

Don’t blame the BLS because the seasonal adjustments are often wrong. Rather, just go to their website and get the non-seasonally adjusted data. BTW, the y-o-y comparisons went positive in July for the first time in 27 months. In October, the advance increased to 626,000 jobs or 0.5%, the largest 12-month gain since February 2008. In other words, the employment gains look pretty solid (or at least better) in October with or without seasonal adjustments. So let’s stop the weird conspiracy theories about the government manipulating the data. They provide the raw data to anyone who wonders by on the internet and clicks on it.

[Bean Counter]

That aside, what would the real number have been if the data had not been jiggered...??

[cookcounty]

"Thus in October 2009, the BLS set the bar at 870,000 jobs, similar to the 840,000 it anticipated in October 2008. This year, by contrast, it lowered the bar to 768,000. Mumbo, jumbo, payrolls presented "an upside surprise" of 100,000.

So, using the current standard, there were significantly FEWER job losses in the waning days of the Bush administration than was reported?

[Qbert]

“BTW, the y-o-y comparisons went positive in July for the first time in 27 months.”

Boosted thanks to census and temp jobs.