Well dear reader, were you surprised that the US economy was so strong that it added a net 242,000 new jobs in February when so many people you know are struggling to find work or make ends meet? Welcome to the twilight zone of government statistics.
First, let me be clear. The government does not just make up these numbers. Hundreds of Ph.D. statisticians do not simply make up numbers. They create highly complex mathematical algorithms and the algorithms make up the numbers.
Tax collection data suggests that 55,000 to 85,000 jobs were added. The latest GDP data on total output and total hours worked suggest no jobs were added, or if there were, they produced nothing. That’s why labor productivity is dropping like a stone. The latest retail data suggests that no jobs were added, or if there were, they weren’t paid anything, or if they were paid, they didn’t need to eat or drive and they live on the street. But none of this matters because those other sets of data are produced by other departments by other Ph.Ds. It doesn’t have to make sense.
Some quick facts from the March 4, 2016 report: Of the 242,000 jobs added, 304,000 of them were part time. That means the economy actually lost 62,000 full time jobs.
Average weekly earnings fell despite minimum wage hikes in many states at the beginning of the year. Are you kidding me?
Average weekly hours fell 0.2 to 34.4 hours. That shouldn’t happen when so many new jobs are being created. Employers usually get more hours from the people they already have before hiring new ones.
You probably don’t know that the jobs report comes from two monthly surveys…one of companies (the Establishment Survey) and one by telephone of people at home (the Household Survey). Did you know:
- In the Household Survey, if you work 1 hour a week, even selling trinkets on EBay, you are considered employed. If you don’t have a job and fail to look for one, you are not considered unemployed, rather, you have dropped out of the labor force. Looking for jobs on Monster does not count as “looking for a job”. You need an actual interview or send out a resume.
- In the Household Survey, if you work three part-time jobs, 12 hours each, you are a full-time employee.
- But in the Establishment Survey, three part time jobs count as three jobs. The potential for double counting jobs is large.
These distortions artificially lower the unemployment rate, artificially boost full time employment and artificially increase the jobs report every month.
Every month, the jobs report moves markets because the Fed supposedly uses this data to set monetary policy. Are you kidding me?