Saturday, July 6, 2024

Inflation even in jobs numbers

Did the economy create 206,000 jobs last month? That’s what the Bureau of Labor Statistics reported on Friday. But don’t believe it. Under President Joe Biden, the BLS has been consistently inflating monthly job growth numbers.

It makes great public relations, because the press reports only on the initial estimate, and rarely follows up on the subsequent downgrades. But it does help explain why nobody believes Biden’s – and the mainstream media’s – propaganda about how great the labor market is doing.

Last month, for example, BLS said that the economy created 272,000 jobs, which the media branded as “whopping,” “robust,” “vigorous,” and a “blowout.” Economists had expected 190,000 new jobs in May.

But on Friday, the Bureau of Labor Statistics admitted that it had overestimated job gains in May by 20%, with the new figure just barely above economists’ expectations. The change barely got a mention in the press.

Likewise, April’s job gain, which the BLS initially claimed was 175,000, is now just 108,000. That’s a 38% downgrade.

January’s 353,000 new jobs – which reportedly “blew economists’ expectations out of the water” – was almost 100,000 jobs too high. February’s initial estimate has since been cut by almost 40,000. (See the chart below.)

Source: Bureau of Labor Statistics I&I Chart

As a result, a quarter million “new” jobs have vanished into thin air so far this year.

This isn’t a new phenomenon. Last year and the year before, the BLS repeatedly announced downward revisions in the number of jobs created.

Why? One big reason is the statistical models the BLS uses to fill in gaps in its survey of businesses have been misfiring. Here’s how Bloomberg explains it:

A chunk of the potential overestimation of payrolls stems from adjustments the agency makes to the monthly employment report to account for the net amount of businesses opening and going under, Wong and Knapp say. Because the BLS only surveys existing establishments, it uses a so-called birth-death model to estimate those flows.

‘The labor market saw a turning point sometime in the second half of 2023,’ Wong said. ‘Business closures surged, while new business formations slowed sharply.’

As a result, the BLS overestimated job growth by about 60,000 each month last year.As we pointed out in June (see “The Unvarnished Truth About That ‘Blockbuster’ Jobs Report”), even these numbers are too rosy, because most of the jobs “created” have been part-time work – many held by people taking on second or third jobs to make ends meet under Biden’s “rescued” economy.

BLS data show that there are 319,000 more adults working multiple jobs today than there were a year ago. Multiple job-holders now account for 5.2% of those employed, up from 4.4% when Biden took office.

All of which helps to explain why, when 1.3 million jobs were supposedly created this year, the number of unemployed climbed by almost 700,000 and the unemployment rate went from 3.7% to 4.1%.

And this is to say nothing of the fact that most of the jobs created went to foreign-born, not native Americans, and real wages are lower today than they were when Biden took office.

It makes us wonder if Biden’s mental deficiencies and his inability to handle numbers have spread to other parts of the federal government.

— Written by the I&I Editorial Board

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