This is the dark secret the bean-counters are trying to hide: that since at last May the economy is…
July’s jobs numbers were amazing. And this is great news!
Or it would be… if the jobs numbers were remotely accurate.
According to the headlines, the U.S. added 528,000 jobs last month. Unfortunately, most if not all of these “jobs” were created in a spreadsheet, not the real economy.
Let’s dive in.
The most obvious issue concerns “seasonal adjustments.” You see, job growth isn’t spread out consistently throughout the calendar year. Some months typically see greater job growth than others. For example, the Retail and Hospitality industries typically see tremendous job growth during the holidays (November through January), and minimal job growth in other times of the year.
The problem here, is that this is going to make some months look great and others look no so good. So the Bureau of Labor Statistics (BLS) tries to get around this with “seasonal adjustments” which are meant to kind of average out the job creation throughout the year.
However, in reality these seasonal adjustments are just gimmick the BLS uses to fake the numbers… particularly at a time when the BLS is under tremendous political pressure to make the economy look better than it really is.
Times like today.
As Bill King notes, the seasonable adjustments for July 2021, were NEGATIVE 65,000. And yet, for some reason, the seasonable adjustments for July 2022, were POSITIVE 287,000.
So right off the bat, there are 352,000 “jobs” (65,000+287,000= 352,000) that were created in a government spreadsheet, NOT the real economy.
This represents over HALF of the supposed jobs created in the month of July 2022!
Then there’s the “Birth/ Death” model.
Throughout the year, new companies are created while old companies go out of business. The BLS tries to get around this issue with its “Birth/ Death” which is meant to average out the numbers throughout the year.
In reality, this too is just another gimmick. And it created another 85,000 jobs last month.
So now we’re talking about 437,000 (352,000+85,000) FAKE jobs.
That’s 437,000 out of the total 528,000 jobs reported for the month of July. Put another way, 82% of the jobs everyone was cheering about were created with accounting gimmicks!
I wish I was done here, but I’m not.
The BLS actually publishes TWO jobs reports… the Household Survey and Non-Farm Payrolls. The Household Survey is based on surveys of actual people while the Non-Farm Payrolls is crafted in a spreadsheet using the gimmicks I’ve already outlined above.
Guess which one tends to be more accurate?
And here’s the zinger… since May of 2022, the Non-Farm Payrolls shows the economy creating nearly one million jobs (926,000 to be exact).
The Household Survey shows the economy has LOST 136,000 jobs over the same time period.
This is the dark secret the bean-counters are trying to hide: that since at last May the economy is LOSING more jobs than it is creating.
There’s a word for this: it’s recession.
Ignore Wall Street and the financial media. The real economy is already in a recession. And those investors who believe the official jobs numbers are being lead like sheeps to the slaughter.
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