"Manipulation" of Labor Statistics

[tritsofme]

I keep hearing as a common theme on these boards, and from many Democrats on the internet that BLS is "cooking the books" for bush and other such nonsense.

People like to say that the job creation numbers come out of thin are and are completely fake.

What I guess I'm getting at, is this distrust of labor statistics purely partisian, or is it distrust of government statistics in general?

When Kerry takes office in January and the payroll report comes out a few weeks later, will the criticism of these statistics and the methods that are in use right now evaporate? Will people suddenly see the light and embrace things such as the Net Birth/Death Model, and let it be the republicans turn to cry that it is fake?

[FloridaPat]

1. Apparently you can get the info at the Dept of Labor web site.

What they're doing is assuming there are a lot of new small companies being created by all of us unemployed people. So they make up a number. Then they assume all these new small companies are creating jobs, but they're not showing up yet on payroll taxes. They have a formula to figure all this out.

Now, the first premiss - are people making a lot of small companies. In my case, I can say yes, I've created a small company when I got unemployed. But I don't have any employees because I am not making enough money to even pay my mortgage.

And that's where the nonsense is coming from. Plus every month is now seasonally adjusted.

[NMDemDist2]

2. I started a new small company after 9/11 and at one point had

6.5 employees, now I have 3, since January


You do the math....

[OHdem10]

3. Manipulation of Labor statistics.

Could it be the inormation they "select" to share with public. Here is an example.

Last month 112,000 new jobs . When the report was given the emphisis was on this number--any new jobs sound good.

Now, they did not mention 47,000 jobs were lost.

So the real or net jobs gained were 65,000.

Furthermore when reporting the 112,00 was reported, no mention was made regarding the fact that 250,000 jobs had been predicted to be gained.
We gained less than half of prediction.

The reports are often politicied to make the WH look better.

All the last monthly figures for the past quarter have been revised downward.

[tritsofme]

5. Prove it

112,000 is the net gain.

Every press release I saw made note of the jobs report being weak.

My question is, will people believe every word from the Labor Dept when Kerry becomes President?

[OHdem10]

6. Will people believe Labor Dept???

It will depend on how the Media determines tp present material.

I think what makes people question all the statisticcs so much right now is the way the Media handles it. Every channel(I monitor them)
come on breathlessly as if they are trying to sell us some soap or shampoo or whatever.. "This is good news for Pres. Bush--blah blah, blah. The people who hang out at DU or Dem. Com or other websites are much more sophisticated than average viewers of TV.
They are going to question everything--It is their nature. I am sure if Media Presentations seems suspicious they will be searching , googling and yahooing to check things out--no matter who is President. I do not think we have to worry about th Media trying to sell us snakeoil for a Demkocratic President

The numbers I gave dcame from Paul Begala, Crossfire, Lou Dobbs , Moneyline and
CNBC(Business News Chanel)

[tritsofme]

7. You're wrong

112,000 is the net seasonally adjuted creation of jobs in June.

If you heard differently, you heard wrong.

[OHdem10]

8. I copied Paul Begal's Chart--Guess Lou Dobbs

and CNBC heard wrong too. These things happen. I cannot get upset over this miniscule error. The real worry or concern should be the falling wages and our sprialing to a banana republ. Few Very Rich at top in gated communities while the masses become poorer.

Does your source show we are trending in the wrong dirction, BTW. Each month of the last quarter we have formed fewer jobs until we now have l12,000 which is about half the projected. Another problem that leads to suspiciousness is the "Rosy Scenario" projections. They have consistenly had to revise the job numbers down as well as the growth rate. Sure, there are bound to be mistakes but to be continuously revising afte the overzealous predictions just makes people question.

I see questioning as healthy and performing a civic duty.

[tritsofme]

9. I really don't know what you are talking about in this regard

340,000 jobs are lost on average every week, and more than that needs to be created if there is a net creation of jobs. I don't know where this 47,000 number came from.

As to revisions, they happen all the time. I think Q1 2004 was the first negative revision to GDP since at least Q4 2002. And the recent negative revision was due to a higher level of imports than previously thought, not a conspiracy. There is a schedule for when the initial report and the subsequent revisions come out for anyone who cares to know.

And as to our economy, I think it is very strong, and I think that if anything Senator Kerry's prediction that we will create 10 million new jobs in the first four years of his administration is understated.

[papau]

13. But in the 112000 is a seasonally adjusted addition of the 180000 pretend

jobs that were added to the non-seasonally adjusted.

The DOL refuses to release the impact the pretend 180,000 had on the final seasonally adj number

The birth death concept is fine - so why did Bush revised the method of estimating it?

[teryang]

4. I studied the local market for very small business

...extensively during a recent protracted period of unemployment. What I found were that most "turnkey" operations were overpriced and not making any profit or very marginal so as not to have a viable future unless they were purchased and overhauled by someone who already had more capital than could be obtained from a typical mortgage refinance. In other words such an individual would not purchase such a low grade operation in any case. I know these sorts of businesses have been selling like hotcakes in our area. The people buying them are either desperate or nuts.

In addition to this commercial real estate prices for properties which were questionable as far as profit potential were astronomical in price and out of reach. How do people justify buying properties that don't make a profit? They get trapped in an onerous commercial lease, make a marginal income, cheat on taxes, and get out whenever they can with as small a loss as possible or they get stuck. A lot of people have blown a tidy inheritance or a mortgage refi on some of these duds.

The commercial leases I've seen are outrageous. You know, the so called triple net leases. One company told me that I would be charged thousands of dollars to have such a lease assigned to me. This thing was like bonded servitude. I told them and others that they were out of their minds.

The funny thing is that after I have explained politely to the business owners the substantial reasons I wouldn't pay their asking price or assume their lease, they call me back later asking if I'm still interested. I'm not bargaining these business prospects are not opportunities at all. They're sinkholes. But then this is my area which is obviously undergoing some kind of suburban urban decay.

10. Job numbers essentially doesn't matter in the macro picture

No matter what the number, there are so many macro variable numbers out of whack--

Wage growth way behind inflation, and further still behind home price growth...

Haven't seen this since 70s era, combined with some aspects of pre-Depression.

It's really a lose-lose until the election for Bush. If the numbers caught up suddenly, interest rates would spike so high it would crash the economy. And if they don't--the economy looks ever more like the pre-Depression era.

Too much, too little, too late. All they can do is try to convince people things are okay until election day.

[idlisambar]

11. healthy skepticism is justified

I am not sure about labor statistics in particular, but in general it seems that the U.S. government has been skewing a lot economic indicators positive at least since the mid-90's. That's when the methodology for calculating inflation began departing from international norms. Lower inflation numbers then translate into higher Real GDP and productivity numbers.

The incentives for government (Republican or Democrat, whatever) are substantial....

One, inflation adjusted benefit payments by government are reduced. For example, the CPI is used to calculate social security payments, and a little tweaking can greatly improve the federal budget outlook, by reducing the payments to seniors down the road.

Two, good numbers are simply good for politics. Everyone gets a chance to pat themselves on the back, and voters are more satisfied with their incumbents.

Of course, at some point the dissonance will be too great so why would politicians and government statisticians do this? Well, even an honest and decent public servant might be susceptible to making such manipulations with no ill intent, because a lot of what makes up the statistics depends on educated guesswork anyway. It is easy to skew the stats by making a favorable assumption or using an optimistic model here and there. "Hedonic pricing" is a good example of a fuzzy accounting method that has a sort of reasonable rational in principle, but mostly functions just to give an artificial boost to the numbers.

[mhr]

12. From The Dallas Federal Reserve, The Attached Chart

shows how Texas cities have faired over the last three years.

Note that Dallas, TX has yet to return to levels of employment seen since the beginning of 2000.

This is hardly stellar performance for an economy that is supposedly hot per the claims of Republicans.

As a Dallas resident, I can say that jobs here are slim pickings.



The chart can be found here online.

http://www.dallasfed.org/data/hotstats/archive/txempl0406.html

[tritsofme]

14. Net Birth/Death Model in July was -91,000

Why didn't they whip out the sauce? That is if that's how these things work.

[whistle]

15. This just proves that the model is unreliable....

...Does an adjustment of -91,000 jobs from the model mean that a proportionate number of small businesses went out of business in July? Does it mean that all those small businesses that Bush keeps referring to in his speeches day after day, had to lay off 91,000 employees? If that was so, why didn't the unemployment rate go up?

This kind of unqualified tinkering by BLS, which happens to be encouraged by the current administration, casts a great deal of doubt over the credibility of the Bureau's reporting methods. I'm sure there are many professional statisticians at the bureau (BLS) who are doing their best to report what they know. I'll just bet that many of the rank and file would like nothing better than to suspend the birth/death model until some clear direction of this economy can be established. But, like NASA leadership under the Reagan administration that oversaw the Challenger disaster, which many engineers at the time said could have been prevented, and more recently under Bush leadership with the Columbia disaster, I think our government bureaucracies are hamstrung by an administration that continues to use lies and deception to future its political agenda.

<go to> http://www.timesizing.com/2uedefns.htm

The under-employment rate in the United States today is staggering, with some estimates putting that rate at nearly 25% of individuals qualified to work, who want to work and make enough money to live not in luxury but at least comfortably and with dignity. This is the great under-class in America. That figure some estimates put at 66 million Americans who want jobs, better jobs but can't find them. Kerry promises 10 million new real jobs for Americans in his first four years of office. I believe he will keep that promise, will grow the economy with little or no inflation, reduce federal deficits and restore integrity in the federal system, which is one reason I'm voting for the Kerry/Edwards ticket.