Tag Archives: BLS

Government Jobs Data: Defining Deviance Downward

Your analysis on the June jobs report was posted in the comments section on the WSJ online.  After reading them, I did some more research based on concepts you introduced [to me].  I learned more in the last 90 minutes about the BLS surveys than from the past 12 months of WSJ articles on the topic.  Thanks.  – from “Jim” in his Linked-In connection request

640,000 thousand people leave the workforce but the unemployment rate drops to 5.3%. Only here in this country now can sell that big bag of shit.  20 years ago anyone would have been embarrassed to print that report or laughed out of the meeting room.  – Dave’s NY friend

NY Friend:  Of all the lies you ever told in your days of a junk bond trader, you never told a lie that blatant.  You used to say a good lie contained an element of truth.

Me:  Dude, I only told lies I knew I could get away with.

NY Friend:  We’re back to the 1977 level of employment when one income could support a household.

Here’s the analysis of the jobs report today from my good friend and colleague, John Titus of Best Evidence:

The labor force is defined as people working or looking for work. It’s a solid approximation of the real jobs number, and it’s on the high side because obviously not everyone looking for work is actually working. But if you accept the sunnyside fudge and equate looking for work with actual work, you’ve got a very accurate picture of jobs.

Since Obama took office in January 2009, the U.S. labor force has added 2.827 million people. Obama’s claim of adding 11 million jobs is just a straightjacket-and-electrodes-crazy lie no matter how you cut it.
What is even worse is that those additions to the labor force came from the total pool of people added to the working age population—a pool that has grown by 15.924 million people.
So under this so-called jobs president, an astounding 82.25% of people enter their working age years without working and without looking for work. Think about that number for a second. More than four out of five people who aren’t working or looking for work is grim, worse-than-Great-Depression-ugly, no matter how small the sample is. But the fucking “sample” here is 100% of everyone added to the entire working age population for almost the last 7 years.
Anyone who thinks that what’s happening in Greece can’t or won’t happen here is at best dreaming and more likely unhinged. Based on the real jobs data, it’s guaranteed to happen here.
The the definition of “defining deviance downward.”  The phrase was first used by Senator Danial Patrick Moynihan in the early 1990’s after Clinton had assumed office to describe the willingness of our society to tolerate the rising criminality and fraud in the political and economic system.
Our system is well past the breaking point of recoverability.  I asserted in 2003 that:  “the elitists running our system will hold up the system with printed money and debt certificates for as long as it takes to sweep every last crumb of middle class wealth off the table and into their own pockets.”
We are witnessing the end-game phase of this operation.  For the record, “middle class” is defined as anyone who does not have enough cash laying around to buy their own Congressman, Senator or the Oval Office.  This means anyone reading this who has a few million in the stock market, bonds and a house or two will soon be stripped of that unless they convert that “wealth” into real money.

Non-Farm Payroll: Ignore Headlines – Labor Force Participation Hits New Low

The headlines reported that 223k people found jobs last month.  Of course, you have to read into the details to find out that the 280k report in June for May that caused a parabolic spike in the stock market was revised significantly lower to 254k.  So the stock market was artificially driven up on a fictitious reporting of a fraudulent number.

In fact, 60,000 jobs were removed from what was originally reported over the last two months.

The real story in today’s report is the fact that the labor force participation rate hit a low not seen since October 1977:

LFPR

Even the Government’s outrageous manipulation of the data and the media’s outrageously bullish spin on the data can’t hide the fact that a record number 93.6 million working age people are NOT in the labor force after 640,000 removed themselves from the pool of people who had been looking for a job.

The birth-death fairy tale threw another 109k into the mix of make-believe jobs that were seasonally-adjusted statistically abused to produce the fictitious jobs reported in the headlines.

The U.S. economic and political system is precariously perched on an insipid foundation of fraud, corruption and debt.  Perhaps most emblematic of this cesspool of waste is the Government’s non-farm payroll report.  It’s nothing but a huge lie which is shamelessly promoted by the media and Wall Street and used by the Fed and the Plunge Protection Team to juice the stock market.

Non-Farm Payroll: “Something Must Be Horribly Wrong For Them To Be This Blatant”

When the propaganda gets so bad that Wall St. Journal readers respond with threats of violence [to the Hilsenrath editorial], you know the lies are getting extreme. Regarding today’s NFP, the numbers are beyond absurd. 57k jobs added in hospitality and leisure? No one has money spend and everyone knows that. We used to laugh at the propaganda numbers coming from the old Soviet Union. The numbers coming from the U.S. Government are a bigger farce than the old Soviet Union’s propaganda…Don’t hold your breath waiting for the Fed to raise rates.  –  John Titus, Best Evidence

The title quote comes from John Embry.  I was going to do a detailed dissection of the Bureau of Labor Statistics non-farm payroll data to show why the numbers are simply can not be believed.  But it’s become a pointless and repetitive exercise.

A colleague of mine thought that next to the October 2012 pre-election NFP, this was the most fraudulent report ever released.  I disagreed because at least back then the GDP reports, for as rigged as they are, were at least showing “growth” would could be used to “justify” reported employment gains.

Today’s report was far more fraudulent than the October 2012 fairy-tale for two reasons. First, we expected the pre-election 2012 fictitious report for obvious reasons.  But second, by the Government’s own numbers the economy contracted in Q1 2015.  Moreover, almost all of the economic data released in April and May showed not only further economic contraction but also that the rate contraction increased.   In Q1 2015 corporate profits dropped by the most amount since 2008 .   Companies DO NOT hire people when their business is contracting.   The non-farm payroll report is a complete fraud.

The non-farm payroll report is the poster-child for everything that is wrong with our country.  The banks have been announcing 10’s of thousands of layoffs coming.  Banks are downsizing because lending activity of all sorts is declining.  When there is no economic activity to finance, it means that the economy is contracting and businesses fire – not hire – workers.  Hewlett Packard, one of the countries largest business services companies announced yesterday that “more layoffs are coming”  LINK.  That means the same holds true for every other large technology/business services company.   These companies did not hire 63,000 people in May only to turnaround and fire them in June.

The Government wants us to believe that the construction industry hired 17k new workers in May.  Yes, construction spending showed a slight bounce in April but this was 110% driven by Government spending, which has been in a downtrend.  Private residential construction spending continued its 3-month decline.  As John Williams of Shadowstats.com summarizes:

The aggregate construction series remained near the recent low of a down-trending pattern of stagnation, with the real series holding at 32.9% below its pre-recession peak of March 2006.  The private-residential series remained down-trending both before and after adjustment for inflation.

This implies that there were not any construction workers added in May.  If anything homebuilders kept their payrolls flat or down-sized.

The BLS claims Financial services added 13k in May.  But sadly, we know just the opposite is true from disclosures by HSBC and JP Morgan.  My friend who works on Wall Street in NYC told me last week that fixed income trading floors all over the Street are like a morgue. Banks and finance companies fired, not hired, in May.

Leisure and hospitality reportedly added 57k workers in May.  Again, this is a complete fairy-tale – an outright fraudulent data-point.  Consumer spending has been declining for the better part of the last year.  Every major consumer sentiment index reported the consumer sentiment and outlook crashed in May.  This means that, to the extent that any consumers might have some disposable income to spend, they are NOT going to spend it. This means the leisure and hospitality companies – at best – kept payrolls flat.  It is a lie of epic proportions to report that this sector was responsible to 57k in jobs added to the economy.

You don’t need me to explain just how fictitious today’s employment report is.  Just look at the graphic below and decide for yourself if the numbers are justified by the economic reports released in May and by your observations in your surrounding environment:

NFPdata

One last point. The Birth/Death model showed 213k jobs created in May from new businesses being started minus businesses that closed. It is not a seasonally adjusted number so it is not mathematically accurate to simply subtract it from the headline 280k number. However, the likelihood is that, even seasonally adjusted, the B/D number was a source of at least 200k of the 280k headline report. By the Government statisticians own admissions, the B/D model is highly overstated when the economy is contracting. The more probable likelihood is that more businesses died than were born in May. This fits with the “for lease” signs I’m seeing in strip malls all over Denver. If anything, this component of payroll measurement likely should caused a decline in employment during May.

But this brings up the question:  why does the Government report its payroll numbers on a seasonally adjusted basis but then releases the B/D model not adjusted?   Of course it’s obvious:  the Government wants its economic reports to be as opaque and misleading as possible.

The Birth-Death Model Plug Theory Predicts New All-Time SPX High Friday

THERE’S NO B.S. LIKE THE BLS – decide what you want you want the non-farm payroll headline number to be and then use the Birth-Death model “plug” function to make that number happen.  – Investment Research Dynamics

The first Friday of the month means it’s the Government’s Bureau of Labor Statistics turn to dazzle us with a statistical magic show.  With 1st quarter GDP now revised into negative territory and the economic statistics reported for April and May showing even more economic contraction occurring in the first two months of Q2, the BLS statisticians will be forced to push the Birth-Dead plug number to a farcical extreme.

In fact, my bet is that on Friday the S&P 500 will scream to a new all-time high on an impressive “beat” of the consensus May payroll estimates that will have been fueled by a huge Birth-Death plug number.

My friend and colleague Mark Kellstrom has penned another amusing commentary about the Freak Show otherwise known as Non-Farm Payroll Friday:

It’s That Time of the Month Again:  May Non-Farm Payrolls

For the 9,000 (or how ever many are left) viewers, the debate by CNBC “experts” over their Non-farm Payroll forecasts minutes before the release of the numbers on Friday morning can provide exciting theater.  Viewers are treated to Steve Liesman’s detailed analysis used to back into an “estimate” based on a complex econometric model tracking monthly stats of all shapes and sizes.  For the rest of us, the exercise is a waste of time and as laughable as anything found on the comedy channel:   Watch Steve Liesman Bite The Head Off Of A Chicken

This Friday, June 5th, we get this ritual of the absurd again with the release of the May Non-Farm Payrolls and Unemployment data from the Bureau of Labor Statistics (BLS).  Estimates for May seem to vary around the +/-220,000 jobs “created” number and if we go with MarketWatch, the consensus estimate is 210,000, down from 223,000 previously.  Like the April NFP reported in May, Commentators have to be nervous eyeballing another month and another raft of soft economic data releases—the “expert” calls may surely be for a miss.

However, once again, if theory holds, the May Non-Farm Payrolls report will beat consensus expectations with no problem.  In fact, if 210k is the consensus hurdle, a beat on the high side may be an easy slam dunk.  History shows that the BLS “Birth Death” plug model will “add” – i.e. fictitiously create – at least 205,000 jobs this month.  So unless the BLS actually “marks to market” the true number of oil patch jobs lost during May (a lot more than the supposed paltry 3,000 oil patch jobs lost in April), then count on another BLS “beat”….much cheerleading…..and a 1Q negative GDP print sent well into the rear view mirror.

BD Plug

 

 

The Government Fraudulently Reported April Inflation Numbers

There’s no B.S. like the BLS – Dave Kranzler, Investment Research Dynamics

The Bureau of Labor Statistics reported the Consumer Price Index for April this morning. This Ministry of “Truth” published an inflation report that asserts that consumer inflation rose .1% month over month for April.   But a further dissection of the numbers shows that the BLS has the price of gasoline falling 1.7% during April.

This is either a politically motivated act of fraud or complete incompetence on the part of the Government statisticians and data gatherers (the Census Bureau).

In fact, the price of gasoline rose over 12% during April – the fastest monthly rise in history:

gasoline

As you can see, the price of gasoline rose from $1.77 to $2.00 during the month of April. Either the people running the BLS are complete incompetent idiots or have been given strict orders from above – i.e. the White House – to produce politically friendly economic reports. Let’s call the BLS “The Ministry of Disinformation.”

The BLS’ distortion of the data it reports is far greater and fraudulent that ANYONE is willing to admit, investigate or report.

Here’s what they did to gold after that fraud-filled CPI report was released (click to enlarge):

Gold hit

Any questions as to the political motivation behind the Government’s intentional release of fraudulent economic data?

SoT Ep 27 John Crudele: “The Unemployment Rate In And Of Itself Is A Joke”

I think the stock market is rigged and I don’t think anybody argues with that anymore.  In 2009 when Goldman Sachs is speaking with the Treasury Secretary – and I have the phone logs –  more times in one day than Treasury Secretary Paulson talks to the Federal Reserve, I have to figure these guys are up to something you know they’re not making vacation plans – they’re doing something. And then when the phone call is just a half an hour before some major rally in the stock market – all documented – then I have to figure they’re up to something.  – John Crudele, Shadow of Truth

Our friend and colleague Bill “Midas” Murphy (GATA, LeMetropole Cafe) hooked us up with John Crudele, business reporter/columnist for the NY Post.  For those of you who do not read the NY Post or have not heard of him, John Crudele is one of the very few reporters who is willing to look for and report the truth.   He’s been a journalist for 40 years, with time spent at the New York Times, New York Magazine, LA Times, Washington Post and, the last 25 years, with the NY Post.

Right now we have a job market that is not doing great but it’s doing better than the economy as a whole…either there’s something we’re not understanding correctly or the numbers are wrong

John was the journalist who exposed fraudulent Census Bureau data reporting in the Bureau of Labor Statistics nonfarm payroll report  (the Census Bureau collects the data). He discovered that one of the Census Bureau’s regions was fabricating 100’s of data collection reports.

If someone is screwing around with those numbers (employment data), then the numbers are going to be wrong…we found there were some cushy deals with politicians in six States.

Crudele and the NY Post currently have SIX Freedom of Information requests into the Census Bureau for which the Census Bureau refuses to answer or turn over documents. Some of the requests are more than a year old.

Many of you are familiar with the JOLTS report (Job Openings and Labor Turnover).  It measures the alleged number of job openings in the United States on a monthly basis. But just like the nonfarm payroll report, this report is egregiously misreported by the Government.

One of Crudele’s readers emailed John and explained to him that every time someone puts in a bid for a Goverment contract, they report those jobs as job openings. But every contractor that puts in a bid on the same contract also reports those jobs as job openings. On the job bid that John’s reader referenced, 20 contractors submitted jobs, which means that 2,000 job openings were reported although only 100 true job openings were going to be produced by the Government contract.  The JOLTS number, in other words, has no bearing on the true number of job openings.

We hope you take the time to listen to this engaging and lively interview with John Crudele.  His commentary is infused with lively New York-style sarcasm and humor.  Chatting with him made me long for a slice of NY pizza or an all-beef hot dog with spicy mustard and kraut from Papaya King, although John informed us his standard fare is one of the NYC dirty water dogs from a stand outside his building. We think you’ll find it refreshing to hear from a journalist who has the guts to stand up for reporting the truth:

The JOLT “Job Openings” Is A Joke

My colleague Rory Hall and I recorded a very engaging podcast interview with John Crudele, business columnist for the NY Post.  He published an article today that exposes deep flaws in Bureau Of Labor Department’s JOLT job openings metric.

Are there really millions of job openings in the US economy today? I’ll get to the point: probably not nearly as many as the government contends.
Tuesday morning the Labor Department is putting out its JOLTS report, which stands for Job Openings and Labor Turnover Survey.
This survey doesn’t have as big a following as the monthly employment report that came out Friday, but JOLTS gives Wall Street hotshots something to trade off and gives TV commentators something to comment on.

Plus it has a catchy acronym. And Wall Street traders are suckers for catchy acronyms. Obviously I don’t know ahead of time what the new JOLTS will be. But back on April 7, the Labor Department reported that there were 5.1 million job openings on the last business day of February. That was the last thing JOLTS reported. Impressive? “Millions” always gets people’s attention. Tuesday’s JOLTS report will give a tally of unfilled jobs for March.

You can read the rest of this article here:  Wake Up To The Truth About JOLTS Numbers

We’ll be posting the podcast to our Shadow of Truth Youtube channel later this week.  Crudele is the only mainstream media news reporter of which I’m aware that is willing to look for and publish the truth.

SoT May 9, 2015 – The Government Employment Report: Theater Of The Absurd

Although heralded in the popular media as indicating reinvigorated employment growth and declining headline unemployment, April’s headline reporting of labor conditions and the accompanying revisions was not a happy circumstance. Underlying economic reality remains deteriorating broad activity. Below the surface, the April labor detail did not tell a happy story…   – John Williams, Shadowstats.com

The U.S. financial markets – and the media’s reporting of all news connected to the markets – have become the biggest farce known to humanity.  The wildly inaccurate methodology used to produce the Government’s non-farm payroll report has become legendary.  So-called financial experts climb on CNBC and Bloomberg and conduct a public display of dissecting and analyzing the numbers as if they are credible.  In my opinion they are doing nothing more than making absolute asses of themselves. The entire spectacle exceeds the mundane  bounds of absurdity by several standard deviations.

The Government and the bubblevision clowns would have us believe that 223,000 people found jobs in April.   But a look “under the hood” of the actual report reveals that 252,000 full time jobs were lost.  This was offset by an alleged increase in 437,000 part-time jobs. But even these numbers require acceptance of the BLS report prima facie.

Even more absurd is the BLS claim that the energy sector lost only 3,300.  It’s an embarrassment to our Government that the BLS would release an official report with that claim in it.   Challenger Gray, which compiles job hiring and firing statistics, reports that the energy sector lost 20,675 jobs during April.

My colleague Rory Hall and I released a brief podcast on our Shadow of Truth Youtube Channel which discusses the  preposterous nature of both Friday’s report and the stock market’s reaction to the report:

Bingo: BLS Pads Employment Report With Birth/Death Plug – SPX Melts Up

Update:   MELT-UP EXTRAORDINAIRE.  Dow up 242 points; SPX up 24 points.  All on a phony number and big downward revision to last month’s phony number.

The Bureau of Labor Statistics, armed with the highly unreliable Census Bureau employment data sample (you, the Taxpayer pay for the this tragicomedy), released its extraordinarily overanalyzed and extraordinarily useless non-farm payroll report today.  According to Bloomberg, the Wall St. brain trust consensus estimate was for 220k jobs “added” to the economy.   The “actual” reported number was 223k.

As predicted, the S&P 500 melted up – click to enlarge:

SPXmeltup

Of course, the hedge fund algos completely ignored the unexpectedly bad number of 126k for March was revised lower to an atrociously horrific 85k. This is by design, people. Hedge fund computers only care about a headline report. The revision does not make the headlines.

As further predicted by my friend and colleague, Mark Kellstrom of Strategic Energy Research, the BLS used its fictitiously calculated “Birth/Death Model” plug metric to pad today’s report with 213,000 “fairytale” jobs.  We wrote about this here:  LINK.  You can verify this here:   LINK – I’m not making this stuff up – I’m not sure Lewis Carroll could have made this up…

The only incorrect prediction was that it was not a huge beat of expectations.  However, it was a huge beat of the “whisper” number, given the poor ADP Payroll report.  I did suggest in a post earlier this week that the ADP report was intentionally managed lower to set up today’s “surprise” and help the Fed stimulate a hedge fund algo SPX melt-up.

Of course, the BLS and it’s mentally challenged Census Bureau lap-dog want us to believe that the unemployment rate is only 5.4%.   I guess this could be true if you want to completely ignore the 93.1 million of the working age population that is not considered to be part of the labor force.  Of course, according John Williams, who looks at how the Government calculated the unemployment rate in 1990 vs. now, the true unemployment rate is more like 23%.

Naturally, if you don’t like something, just ignore it.  The BLS has determined that only 3,000 energy sector jobs were lost in April.  Hmmm…that one has me scratching my head. Especially after you look at this chart produced by Zerohedge yesterday:  LINK.   Retail was given credit with producing 12.1k jobs during April.  That is patently absurd given that we know the retail sector is closing down at least 6,000 stores nationwide over the next 18 months.

It just doesn’t get any more absurd than this.  It just goes to show:  “There’s no B.S. Like The BLS.” 

John Crudele (NY Post): “Beware Of The Phantom: ‘New Jobs’ Hoax”

This Friday, the Labor Department will announce job growth and the unemployment rate for April and — drum roll, please — it probably won’t look as ugly as the GDP. That’s because Labor uses trick statistics when it gives a picture of the springtime job market. – John Crudele, NY Post (article link)

John Crudele is a business columnist for the NY Post.  He happens to be the only mainstream media reporter of which I’m aware that seeks out and reports the truth.  This morning he wrote an article in which he attacked the credibility of the Government’s employment report.

In fact Crudele was the reporter who discovered that some of the data collectors for the Census Bureau were fraudulently filling out the surveys that go into the employment report  (the Census Bureau collects labor data for the Government).

Crudele’s article today zero’d in on the nefarious “birth/death model,” which essentially is used by the Government statistical manipulators as a “plug” in order to decorate the monthly report with better numbers:

Each spring, Labor starts adding phantom jobs to its count — jobs they guess have been created but can’t prove have been created. Some of that phantom spirit is tied to the weather. No, really. At Labor, good weather = the birth of companies = more jobs.

And even in this day and age of instantaneous knowledge of everything, Labor still guesses at how many jobs these newly born companies are generating.
When it reports April employment numbers this Friday at 8:30 a.m., Labor will include about 263,000 phantom jobs.

At least, that is how many phantom jobs it factored in last May.

Crudele’s article reinforces and lends support to my blog post last week in which my friend and colleague, Mark Kellstrom, explained why the Government’s use of the birth/death model plug would likely lead to a sizable “beat” of the consensus forecast for Friday’s report:   Non-Farm Payroll Prediction:  Huge Beat/SPX Will Melt Up.

The rigged Government statistics are designed to trigger buying activity from the hedge fund computer algorithm “black box” programs.   Just before the report is released on Friday, the NY Fed will throw a massive buy order into its electronic trading system for S&P 500 eminis (directionally, the eminis typically lead the big futures contract which typically leads the cash S&P index).  The hedge fund computers will “see” that order and front-run the Fed by placing massive buy orders in for the big S&P contract.  By the time the NYSE opens, the futures will be up 20-30 pts and a ravenous frenzy of HFT buying programs will rush into the stock market.

None of this buying of course will have any fundamental basis.  But the phony Government economic reports are the quintessential representation of the fact that the entire U.S. economic and political system is one massive fraud.