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Riddle me this: When does 524,000 = 678,000 = 748,000?



January 12, 2009 – Comments (4)

Riddle me this Batman: When does 524,000 = 678,000 = 748,000?  Give up?  Apparently when you're the Bureau of Labor Statistics, the government agency that brought us the seemingly in-line estimate of job losses in December.

I blogged on Friday about how when one adds this additional 154,000 job cuts that the BLS "found" for October and November to the December number, were talking about a total of 678,000 jobs lost (see post: December Jobs Report: Mr. Market shrugs it off, but it is much worse than the headline number indicates).  Well, now I found out this weekend that the BLS is up to its old tricks with the BS birth / death model again.

In short, the BLS uses the Birth / Death adjustment to "adjust" the actual job numbers to account for jobs that were created by companies which are either too new or too small to be found by its surveys.  Now I don't know about you, but I personally find it exceedingly hard to believe that more businesses are being created than destroyed in this sort of economy, but that's not what the BLS thinks.  It added an imaginary 70,000 phony jobs to its reported December number using the Birth / Death adjustment.

So here's the final tally for the month: 524,000 job losses reported + 154,000 additional losses in the prior two months + 70,000 for the Birth / Death adjustment = 748,000 job losses in December.  The economy is in rough shape my friends.  Let's just hope that the job losses are front-loaded into the end of '08 / beginning of '09 and that the economy will stabilize (at possibly as high 10% unemployment) in the second half of the year.


4 Comments – Post Your Own

#1) On January 12, 2009 at 6:11 AM, DaretothREdux (51.57) wrote:

Thanks for that. Very well researched. But if there if one thing the government can do better than anyone's lie.

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#2) On January 12, 2009 at 10:37 AM, anchak (99.91) wrote:

I have long given up...however one needs to be aware of the seasonal trend..... Unemployment claims peak in Q1 - which means its going to be ugly in Feb/Mar

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#3) On January 12, 2009 at 11:24 AM, Imperial1964 (94.16) wrote:

Lies, Damn lies, and the Bureau of Labor Statistics.

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#4) On January 12, 2009 at 11:30 PM, nuf2bdangrus (< 20) wrote:

Their pants are on fire.  And everybody knows it.  Yet we repeat the lies, because as long as everybody believes the lie they all know to be a lie, then this whole charade can continue.  Unemployment will cross 10% on the "official" stats by the end of 2009.  I wish it weren't so. 

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