Saturday, June 8, 2013
Non Farm payrolls came in at an anemic 175,000 five years into this fantastic recovery. Not even enough to keep up with population entering the work force. Still, it was celebrated as further proof that the economy is picking up steam. Five years into a recovery.
What was not widely reported was that the Birth Death model, in which bureaucrats at the Bureau of Labor Statistics simply guestimate a number of unreported jobs and add that in to mix. They guestimated that 205,000 unreported jobs were most probably created last month.
That means that without this guestimate, employers reported a net loss of 30,000 jobs.
This goes on under every administration. And apologists for this practice will swear up and down that over time the guestimates even out.
But with average work weak flatlining, hourly earnings flatlining, and real leisure and retail jobs declining, it's tough to understand the 77,000 jobs the BLS figured were probably created in those areas. And with manufacturing contracting, it seems odd that manufacturing would have added 5000 jobs as guestimated.
In fact, over the last four months the economy has been averaging 150,000 jobs per month. This number is horrible - five years into a recovery. But when you take into account the 148,000 of the 150,000 are accounted for not by the BLS survey, but by additions to the survey guestimated by the BLS Birth/Death adjustment, it pretty difficult to understand the enthusiasm over the recovery.
The things is, The Labor Force participation rate at 63% - counting all those part time workers - is still 3 percentage points below the worst figure of the 2008 recession.
All those people out of work, working part time, fighting to survive are not terribly likely to be fooled by the bureaucrats at the BLS.
Maybe you shouldn't be either.