The 'Helicopter
Economics Investing
Guide' is meant to help
educate people on how to
make profitable investing
choices in the current
economic environment.
We have coined this term
to describe the current
monetary and fiscal
policies of the U.S.
government, which
involve unprecedented
money printing. This is the
official blog of the New
York Investing meetup.
Economics Investing
Guide' is meant to help
educate people on how to
make profitable investing
choices in the current
economic environment.
We have coined this term
to describe the current
monetary and fiscal
policies of the U.S.
government, which
involve unprecedented
money printing. This is the
official blog of the New
York Investing meetup.
 | |  | |  | |  |
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BLS Press Release
MisReports August
Jobs Data
Daryl Montgomery
09/05/2010
MisReports August
Jobs Data
Daryl Montgomery
09/05/2010
According to the August jobs report, the U.S. lost another 54,000 jobs last month and
the unemployment rate rose to 9.6%. The government claimed that the private sector
added 67,000 jobs, although most of these jobs came from the Health Care and Social
by the government. The numbers in the BLS (Bureau of Labor Statistics) press release did
not agree with the Data Tables and of course made things look better than they
actually were.
The data in the non-farm payrolls report indicated that there were 40,200 jobs created
in the Health Care and Social Assistance category (the mainstream media almost
always leaves off the Social Assistance part, perhaps because these are so obviously
government and not private sector jobs). Interestingly the BLS (Bureau of Labor
Statistics) press release only admitted to 28,000 jobs and this incorrect number was
picked up in every mainstream media article. The BLS press release, which can be
found at: http://www.bls.gov/news.release/pdf/empsit.pdf, stated "Employment in
health care increased by 28,000 in August, with the largest gains occurring in
ambulatory health care services (+17,000) and hospitals (+9,000)". The Establishment
Data Seasonally Adjusted (Table B in the report), which can be found at:
http://www.bls.gov/news.release/empsit.b.htm, stated that the number of jobs in
Health Care and Social Assistance increased by 40,200.
The Goods Producing Sector, which actually does include mostly private sector jobs
(nationalized companies like General Motors being the exception), was dead in the
water in August. The total number of jobs added was ZERO. Goods producing industries
include Manufacturing, Mining and Logging, and Construction. Manufacturing lost
27,000 jobs and this contradicts the rosy picture painted by the ISM manufacturing
report from two days ago that indicated U.S. manufacturing employment was
skyrocketing. Construction kept the Goods Producing Sector from being negative by
adding 19,000 jobs. This occurred even though new home sales recently fell to the
lowest number ever recorded. Perhaps these workers are busy building castles (or more
appropriately, McMansions) in the sky, so of course their work isn't immediately visible
to ordinary mortals such as ourselves.
There is no evidence in the August payroll numbers of any significant non-government
related hiring taking place. The first job loss number was reported three years ago in
August 2007 and after over $3 trillion in deficit spending since then, the U.S.
employment situation has managed to only reach a state of controlled bleeding.
There were an estimated 6.6 million students graduating from school this year and
eventually most of them will need a job. That implies the U.S. needs 550,000 new jobs a
month to absorb former students into the labor force. People are of course always
leaving the labor force as well because of retirement and for other reasons such as
giving up looking for a job because none are available. It has been generally
accepted for a long time that the U.S. must add at least 200,000 jobs a month to just
accommodate new people looking for work. Even after getting to that level, and we
are still losing jobs not gaining them, there is then an additional 8 million jobs that have
to be created to replace those lost during the Credit Crisis. So far, it's just not
happening.
Daryl Montgomery
the unemployment rate rose to 9.6%. The government claimed that the private sector
added 67,000 jobs, although most of these jobs came from the Health Care and Social
by the government. The numbers in the BLS (Bureau of Labor Statistics) press release did
not agree with the Data Tables and of course made things look better than they
actually were.
The data in the non-farm payrolls report indicated that there were 40,200 jobs created
in the Health Care and Social Assistance category (the mainstream media almost
always leaves off the Social Assistance part, perhaps because these are so obviously
government and not private sector jobs). Interestingly the BLS (Bureau of Labor
Statistics) press release only admitted to 28,000 jobs and this incorrect number was
picked up in every mainstream media article. The BLS press release, which can be
found at: http://www.bls.gov/news.release/pdf/empsit.pdf, stated "Employment in
health care increased by 28,000 in August, with the largest gains occurring in
ambulatory health care services (+17,000) and hospitals (+9,000)". The Establishment
Data Seasonally Adjusted (Table B in the report), which can be found at:
http://www.bls.gov/news.release/empsit.b.htm, stated that the number of jobs in
Health Care and Social Assistance increased by 40,200.
The Goods Producing Sector, which actually does include mostly private sector jobs
(nationalized companies like General Motors being the exception), was dead in the
water in August. The total number of jobs added was ZERO. Goods producing industries
include Manufacturing, Mining and Logging, and Construction. Manufacturing lost
27,000 jobs and this contradicts the rosy picture painted by the ISM manufacturing
report from two days ago that indicated U.S. manufacturing employment was
skyrocketing. Construction kept the Goods Producing Sector from being negative by
adding 19,000 jobs. This occurred even though new home sales recently fell to the
lowest number ever recorded. Perhaps these workers are busy building castles (or more
appropriately, McMansions) in the sky, so of course their work isn't immediately visible
to ordinary mortals such as ourselves.
There is no evidence in the August payroll numbers of any significant non-government
related hiring taking place. The first job loss number was reported three years ago in
August 2007 and after over $3 trillion in deficit spending since then, the U.S.
employment situation has managed to only reach a state of controlled bleeding.
There were an estimated 6.6 million students graduating from school this year and
eventually most of them will need a job. That implies the U.S. needs 550,000 new jobs a
month to absorb former students into the labor force. People are of course always
leaving the labor force as well because of retirement and for other reasons such as
giving up looking for a job because none are available. It has been generally
accepted for a long time that the U.S. must add at least 200,000 jobs a month to just
accommodate new people looking for work. Even after getting to that level, and we
are still losing jobs not gaining them, there is then an additional 8 million jobs that have
to be created to replace those lost during the Credit Crisis. So far, it's just not
happening.
Daryl Montgomery
Real e Finance
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