Whenever there’s a cheerful jobs report propagated by corporate news, many of us know they’re lying (because it just doesn’t correspond to reality) though we might not know exactly how the numbers they use decieve us. At Counterpunch.org, Paul Craig Roberts dissects some of the figures cited by the Bureau of Labor Statistics as support for claims of an economic recovery. For example, their payroll jobs report says that the US economy created 203,000 jobs in November. Since it takes about 130,000 new jobs each month to keep up with population growth, the remaining 70,000 of the jobs would have only slightly reduced the unemployment rate yet it supposedly fell from 7.3 to 7.0 which is too much. It turns out the payroll survey counts a person holding two jobs as if it were two employed persons, while the unemployment rate is calculated from the household survey, which counts a person holding two or more jobs as one job. Though the two figures are often reported together, they actually have no connection.
Payroll numbers can be skewed by seasonal hiring and because the birth-death model used to estimate the numbers of unreported business shutdowns and startups often underestimate the former and overestimate the latter. The unemployment rate figures are innacurate because it leaves out people who have given up on looking for work. The greater the number of discouraged workers there are, the lower the rate of unemployment, according to the BLS.
So exactly where and what are the 203,000 new payroll jobs created in November? Paul Craig Roberts breaks down the figures as reported by the BLS and discovered that the majority are lowly-paid, part-time, nontradable (non exportable) domestic service jobs including:
…retail trade with 22,300 jobs, transportation and warehousing with 30,500 jobs, temporary help services with 16,400 jobs, ambulatory health care services with 26,300 jobs, home health care services with 11,800 jobs, and the old reliable waitresses and bartenders with 17,900 jobs.
This is the jobs profile of the American super economy. It is the profile of India 30 or 40 years ago.
PCR continues his analysis by citing the work of statistician John Williams (shadowstats.com), who found more misstated jobs that could be attributed to the government shutdown and reopening, the birth-death model, and concurrent-seasonal-adjustment errors. According to Williams, whose figures include long-term discouraged workers who cannot find a job, the US unemployment rate is actually 23.2%.
Of course there’s no recovery with a 23.2% unemployment rate, but to keep stocks and bonds at all-time record high levels, the Federal Reserve is printing $1,000 billion new dollars annually, potentially creating an economic bubble. Despite these issues, the BLS estimated a third quarter GDP growth of 3.6%. Paul Craig Roberts challenges this claim with the following figures:
US real median household income has declined from $56,189 in 2007 to $51,371 in 2012, a decline of $4,818 or 8.6%. http://www.deptofnumbers.com/income/us/
US real per capita income has declined from $29,554 in 2007 to $27,319 in 2012, a drop of $2,235 or 7.5%.
According to the Bureau of Labor Statistics, there are 1,277,000 fewer seasonally adjusted payroll jobs in November 2013 than in December 2007.
He concludes by asking:
How it is possible for the economy to have been in recovery since June 2009 (according to the National Bureau of Economic Research) and there are 1,277,000 fewer jobs today than existed six years ago prior to the recession?
How has real Gross Domestic Product recovered when jobs and real consumer incomes have not?