A Quick Word about the Unemployment Report

I don't like to waste space talking about the fictitious monthly report because by the time I read through the details I am generally laughing too hard to make a cogent posting, and why recreate the wheel when Mish does a full blown analysis but I do want to point out some of the funnier things this month (by funny, I mean pathetic/sad)

First, if you are a newer reader head over to [May 2: Employment Report and More Fed Actions] and read points 1 and 2 so you have an inkling of what the following means.

So as Mish points out even "if" you believe in the accuracy of these numbers (remember it is a survey, not some huge database of information - and it gets revised by very large amounts a year into the future) but let's say you do believe the data... (Mish data in brown below)

Highlights

• 43,000 construction jobs were lost
• 33,000 manufacturing jobs were lost
• 8,000 retail trade jobs were lost
• 51,000 professional and business services jobs were lost
  
• 7,000 service providing jobs were added
• 24,000 leisure and hospitality jobs were added
  
• 29,000 government jobs were added
  

A total of 69,000 goods producing jobs were lost (higher paying jobs), and for the second consecutive month service providing jobs were weak. Government, the last pace one wants to see jobs, added 29,000 jobs or the service sector would have contracted. Last month education and health services added 54,000 jobs, this month 29,000.

So once again my beef is the only places we are really creating jobs are healthcare and government - the two places we LEAST want to add jobs because they are becoming a tax burden on all of us. But so it continues. (and the city/state government jobs will soon be cut back as budgets are busted - all that will be left are federal government jobs increasing)

Now on to my favorite part the Birth/Death Model aka "the part we make up figures out of the blue" or the official explanation "it is very hard to survey small businesses that are newly created so we're guessing"

Here is how it looks

(click to enlarge)


In fact, don't bother to look - let me tell you YET again the BLS (Bureau of Labor Statistics) has found in in their heart to find 29,000 NEW construction jobs. 22,000 NEW professional jobs as the entire real estate industry shrinks and realtors, mortgage brokers, and the like go out of business. 86,000 NEW hospitality and leisure jobs (hello, staycations?) and in total 177,000 new jobs out of thin air. In a recessionary economy (ex natural resources) Got it.

Last piece of fun is what I call the underemployment rate - all the people who want jobs but have given up, all the people in part time jobs but wish to have full time jobs - even the governments skewed numbers show a 9.9% rate. I think it's higher than that myself since the government undershoots everything, but certainly the reality is a lot higher than 5.5% unemployment rate espoused on tonight's nightly news.

Why do we keep mentioning this stuff? So when people scratch their head and say why do people feel so uncertain and why are they cutting back on their shopping, when unemployment is historically low and inflation is benign and all the data show things are just fine thank you - well those media folk are using government reports. Which have been altered over the years to the point they are becoming plain useless. So any comparisons to "how great everything is compared to the 1970s when people REALLY had things to complain about" is a poor argument as we have completely different ways of creating our numbers in the '00s.