Government Labor Statistics: Lies and Damned Lies

Government Labor Statistics: Lies and Damned Lies
By Dave Lindorff
2-5-10

For months, the various government departments dealing with things economic--Treasury, Commerce, Labor and of course the Council of Economic Advisers and the Federal Reserve, have been issuing soothing words that the nation’s economy is headed back up from the Great Recession that allegedly began in December 2007.

But now comes word from the Department of Labor that, whoops, we mis underestimated, as former President George W. Bush would say, the number of jobs lost. The Department of Labor’s Bureau of Labor Statistics is reporting that because of a “modeling error,â€

The unemployment rate fell from 10.0 to 9.7 percent in January, and nonfarm payroll employment was essentially unchanged (-20,000), the U.S. Bureau of Labor Statistics reported today. Employment fell in construction and in transportation and warehousing, while temporary help services and retail trade added jobs. In January, the federal government added 33,000 jobs, including 9,000 temporary positions for Census 2010. Employment in state and local governments, excluding education, continued to trend down.

In accordance with usual practice, BLS will not revise the official household survey estimates for December 2009 or earlier months. To show the impact of the population adjustment, however, differences in selected December 2009 labor force series based on the old and new population estimates are shown in table B. The adjustment decreased the estimated size of the civilian noninstitutional population in December by 258,000, the civilian labor force by 249,000, and employment by 243,000; the new population estimates had a negligible impact on unemployment rates and other percentage estimates.

Did you catch the sleight-of-hand? The total labor force is being reduced while they are adding 33,000 census takers to the rolls as full-time employees, thus they are getting their (statistical) improvement. Discouraged workers are nowhere to be found. Table A shows the reduction of total non-farm employees in 2009. While reducing the number of (427,000 fictitious) jobs, they reduced the number of total workforce, which gave a statistically lower percentage of unemployed, after counting part-time census takers as full-time employees.

When you run into headlines like "Payrolls fall in January, jobless rate at 5-month low" don't stop and ask "If 20,000 jobs are going away, how can the unemployment rate drop?" If you are scratching your head, you're not supposed to understand any of this stuff...isn't everything clear? The BLS should be abolished. It serves no useful function.

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