The Dangers of Investing Based on Phony Government Statistics

By Stefan Gleason – Re-Blogged From Money Metals Exchange

President Donald Trump recently took to Twitter to boast, “The U.S. has an increased economic value of more than 7 Trillion Dollars since the Election. May be the best economy in the history of our country. Record Jobs numbers. Nice!”

“We ran out of words to describe how good the jobs numbers are,” reported Neil Irwin of the New York Times, amplified in a Trump retweet. If you believe the headline numbers, joblessness is at a generational low with the economy booming.

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Jobs, Wages, and Growth

   By Bob Shapiro

I posted an article wondering why wages haven’t been going up faster, considering that the Jobs picture looks so good. Though many of you may agree with the article, I’d like to offer an alternative point of view.

Have jobs been increasing dramatically? No, the official numbers are being misreported in news stories. What IS happening is that the US jobs market continues to lose full time workers while gaining a larger number of part time positions.

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Continue To Beware The Job Numbers (Is it The Bureau Of Labor Statistics Or Bureau of Lying Statistics?)

By David Haggith – Re-Blogged From http://www.Silver-Phoenix500.com

Alternative Unemployment Measurement

By John Williams – Re-Blogged From http://www.ShadowStats.com

Counting All Discouraged/Displaced Workers, May 2016 Unemployment Rose to About 23.0%. Discussed frequently in the regular ShadowStats Commentaries on monthly unemployment conditions, what removes headline-unemployment reporting from common experience and broad, underlying economic reality, simply is definitional. To be counted among the U.S. government’s headline unemployed (U.3), an individual has to have looked actively for work within the four weeks prior to the unemployment survey conducted for the Bureau of Labor Statistic (BLS). If the active search for work was in the last year, but not in the last four weeks, the individual is considered a “discouraged worker” by the BLS, and not counted in the headline labor force.

ShadowStats defines that group as “short-term discouraged workers,” as opposed to those who, after one year, no longer are counted as “discouraged” by the government. Instead, they enter the realm of “long– term discouraged workers,” those displaced by extraordinary economic conditions, including regional/local businesses activity affected negatively by trade agreements or by other factors shifting U.S. productive assets offshore, as defined and counted by ShadowStats (see the extended comments in the ShadowStats Alternate Unemployment Measure).

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Another Election Year, Another Bunch Of Fake Growth Numbers

By John Rubino – Re-Blogged From http://www.Gold-Eagle.com

Some pretty good economic reports have energized various parts of the financial markets lately. Consumer spending is up, GDP is exceeding expectations and even factory orders, that perennial downer, popped this morning.

In response the dollar is soaring and interest rates are at breaking out of their multi-decade down-channel. The economy is clearly recovering, implying a return to normality. Right?

Nah, it’s just the usual election year illusion. When the presidency is at stake the party in power always pumps up spending in an attempt to put people back to work and create the impression of a well-run country whose leaders deserve more time in the spotlight. After the election, spending returns to trend and the resulting bad news gets buried in “political honeymoon” media coverage.

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Near-Record 94.6 Million Americans Aren’t in Workforce

Re-Blogged From http://www.newsmax.com

Behind the cheerful spin the Labor Department and government talking heads put on the official monthly jobs data is a sobering reality: a more-realistic unemployment rate is probably closer to 10 percent and a wide swatch of the American public remains out of work.

Friday’s report sketched a picture of a resilient job market that likely keeps the Federal Reserve on track to raise interest rates when it meets next month.

Yet the economy remains pocketed by weaknesses that have left many feeling left behind on the eve of Election Day. Job gains have been steady, but pay raises have only recently become widespread. And millions of Americans are working part time but would prefer full-time work.

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Statistical Shenanigans at BLS

cropped-bob-shapiro.jpg   By Bob Shapiro

Non-farm private payrolls for July came in with a surprise 43,000 larger increase than expected. Including new government jobs, the number reported was 75,000 larger than expected.

But, can we really believe the numbers?

This is a Presidential election year, and it turns out that the numbers influence the election results. Good numbers – and a rising stock market – presage a continuation of the party in power, while bad numbers – and a falling market – seem to forecast a turnover to the opposite party.

There seems to be enough motive to fudge the numbers. But, how do you fudge the non-farm payrolls number? People either are working or they’re not working.

One way is through the so-called Birth-Death Model. As the bean counters collect their data, they don’t actually count every single person and business in the country. Instead, they survey a sample – in statistics, a survey of a thousand can come surprisingly close to the results you would get if you counted the whole population.

From the results they get using just the sample, they project what the whole economy is. But the US Economy changes constantly. People leave jobs, and others get jobs. Businesses go out of business, while others start up.

To account for the changing landscape of US businesses, the Bureau of Labor Statistics (BLS) uses its Birth Death Model – they pick a number out of thin air, hoping the number is close – or at least believable. Here are the numbers for the last year or so:

Birth Death 080816

Since April 2015, only three times has the BLS said the Birth-Death Model called for a reduction of the official number, for a total of 280,000 jobs. Against that, there were 13 months of upward adjustments (guesses) for a total of 1,839,000 extra jobs, over and above what their actual survey results said there should be.

If we remove the Birth-Death adjustment for July, instead of beating the estimate by 75,000, it would have fallen short by 37,000. In my book, the numbers are bogus – politically motivated.

After all the hard work of collecting the actual data that the rank and file BLS (and other agency) employees do, their bosses make them look like criminals because of all the phonying up that the bosses do.

It likely will not happen ever, but I can dream that someday a new President will have the good sense to investigate and prosecute the perpetrators of fraud at the BLS.