Lies, Damn Lies and Unemployment Rates... 10.7% U3 Anyone?
Tasteful Photo: Courtesy Jesse's Cafe Americain
We have discussed the phoniness of the U3 measure of unemployment. We have discussed the "marginally attached" worker not being counted as unemployed by U3 when their unemployment benefits run out... even though they are obviously still unemployed by U-Reality measure...
We have discussed the Birth/Death Ratio model used by the
Bureau of Labor Statistics before. The BLS invented this model to account for
jobs created by the Births and Deaths of small businesses that add or subtract
employment (mostly add) that are supposedly missed by the BLS monthly surveys.
The BLS claims these jobs are added, yet the only hard data the BLS uses is payroll and payroll tax data, which they choose to ignore or give less weight to. After all if the IRS is collecting payroll tax payments monthly for businesses with payrolls over $50k of payroll and quarterly for businesses under $50k in payroll... why believe that kind of hard data on payroll expansion?
On October 2, 2009, the BLS admitted it had overstated job
creation by 824,000 jobs mostly in the first quarter 2009. According to Bloomberg:
U.S. Job Losses May Be Even Larger, Model Breaks Down
(Update1)
"About 824,000 more jobs may be subtracted from the payroll count for the 12 months through last March when the figures are officially revised early next year, a Labor Department report showed today. The revision would be the biggest since at least 1991."
