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The Truth About The BLS Lies

Tyler Durden's picture





 

All you need to know about how the BLS really counts unemployment in one simple cartoon.

 

And, as we expected earlier, here is Mr. Biderman's summation on what will likely one day (after Russian hackers get into BLS emails) turn out to be an advance April fool's joke by the Bureau of Lies and Stupidity:

TrimTabs employment analysis, which uses real-time daily income tax deposits from all U.S. taxpayers to compute employment growth, estimated that the U.S. economy shed 255,000 jobs in November.  This past month’s results were an improvement of only 10.2% from the 284,000 jobs lost in October.

Meanwhile, the Bureau of Labor Statistics (BLS) reported that the U.S. economy lost an astonishingly better than expected 11,000 jobs in November.  In addition, the BLS revised their September and October results down a whopping 203,000 jobs, resulting in a 45% improvement over their preliminary results.

Something is not right in Kansas! Either the BLS results are wrong, our results are in error, or the truth lies somewhere in the middle.

We believe the BLS is grossly underestimating current job losses due to their flawed survey methodology. Those flaws include rigid seasonal adjustments, a mysterious birth/death adjustment, and the fact that only 40% to 60% of the BLS survey is complete by the time of the first release and subject to revision. 

Seasonal adjustments are particularly problematic around the holiday season due to the large number of temporary holiday-related jobs added to payrolls in October and November which then disappear in January. In the past two months, the BLS seasonal adjustments subtracted 2.4 million jobs from the results.  In January, when the seasonal adjustments are the largest of the year, the BLS will add anywhere from 2.0 to 2.3 million jobs. In our opinion, trying to glean monthly job losses numbering in the tens of thousands or even in the hundreds of thousands are lost in the enormous size of the seasonal adjustments.

In November, the BLS revised their September and October job losses down a surprising 44.5%, or 203,000 jobs. In the twelve months ending in October, the BLS revised their job loss estimates up or down by a staggering 679,000 jobs, or 13.0%. Until this past month, these revisions brought the BLS’ revised estimates to within a couple percent of TrimTabs’ original estimates.

The large divergence between the two results begs the question of what is causing the difference.  While we don’t have an answer today, we will be poring over the data in an attempt to answer that question.

Charles - here's a hint: FOIA Obama's TV tour for January. That way you will know what kind of NFP numbers to expect next month.

 


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Fri, 12/04/2009 - 16:34 | Link to Comment order6102
order6102's picture

BRILLIANT!

Fri, 12/04/2009 - 16:35 | Link to Comment CharlesBronson
CharlesBronson's picture

How could they forget "I was on unemployment but the program ended".....

Fri, 12/04/2009 - 16:43 | Link to Comment mr brincq
mr brincq's picture

I will spread it...fantastic!! people understand it finally and hopefully...what a wet fart rally today!

Fri, 12/04/2009 - 16:43 | Link to Comment D.O.D.
D.O.D.'s picture

Does poker count as a job?

Answer: Only if you win.

Fri, 12/04/2009 - 16:47 | Link to Comment NYPoke
NYPoke's picture

My kids are going to love this.  Vampire Squid, cartoons... No better way to teach economics.

Fri, 12/04/2009 - 16:49 | Link to Comment skullnbones
skullnbones's picture

BLS - Bureau of Lickers and Suckers

Fri, 12/04/2009 - 16:49 | Link to Comment no cnbc cretin
no cnbc cretin's picture

BLS is wrong. Real info here: http://www.shadowstats.com/alternate_data

Fri, 12/04/2009 - 16:58 | Link to Comment Señor Tranche
Señor Tranche's picture

+1

Fri, 12/04/2009 - 16:55 | Link to Comment Anonymous
Fri, 12/04/2009 - 16:57 | Link to Comment Anonymous
Fri, 12/04/2009 - 17:15 | Link to Comment Daedal
Daedal's picture

It makes you a jobless felon (if the health care bill passes).

Sat, 12/05/2009 - 14:43 | Link to Comment Anonymous
Fri, 12/04/2009 - 16:57 | Link to Comment Anonymous
Fri, 12/04/2009 - 16:58 | Link to Comment Gilgamesh
Gilgamesh's picture

Tyler, on another note - could you throw up another Intraday Index px w/ volume chart for today?  Very telling. 

It was already headed for the highest volume in the last month, so there's no way it could stay red into the close...  Look how little it took to gun it up for final reporting.

Fri, 12/04/2009 - 17:01 | Link to Comment Anonymous
Fri, 12/04/2009 - 17:04 | Link to Comment Steak
Steak's picture

the most encouraging thing from this to me is that mint.com put this together.  moral of the story: its now becoming profitable to tell the truth about what is going on in the economy.  if only we could begin making it unprofitable for politicians to lie to us about the economy then we'd really be getting somewhere.

Fri, 12/04/2009 - 17:04 | Link to Comment Anonymous
Fri, 12/04/2009 - 17:24 | Link to Comment Anonymous
Fri, 12/04/2009 - 17:10 | Link to Comment Anonymous
Fri, 12/04/2009 - 17:17 | Link to Comment Anonymous
Fri, 12/04/2009 - 17:19 | Link to Comment deadhead
deadhead's picture

you know how false these numbers are?

earlier today, even cnbc dot com had a headling that said

"Jobs Number: Are they almost too good to be true"

 

honestly, if there was ever a government agency jumping the phucking shark, this has got to be it.

perhaps bernanke might want to check back on his history to read about what happens when markets are grossly manipulated and mr. efficient market finds out.

and, he will.

and, the dems will blame the repubs.

and, the repubs will blame the dems.

and, the middle class will get phucked again.

and, someone will take home all the money.....

Fri, 12/04/2009 - 17:25 | Link to Comment john_connor
john_connor's picture

+10

Fri, 12/04/2009 - 18:21 | Link to Comment B9K9
B9K9's picture

I think many here are missing the point; of course the numbers are fake. But like non-repesentational art, it isn't about the substance, it's about the impression.

And even the impression is false, since those trading on either side of the data simply care not a whit as to the foundation.

Doesn't anyone @ZH get it? If everyone wants to believe, even if their belief is disbelief, then what is to stop them from believing? Who cares if we exist in a hall of mirrors if you know you exist in a hall of mirrors?

This whole notion of efficient markets & effective capital allocation really needs to find its place back in the dorm rooms. The reality is that in a world governed by neo-Keynesian functional finance, substance doesn't matter!

Government fiat will direct capital flows to those sectors by which it has been identified to create the greatest employment. If there are no alternative investment mechanisms, how do you escape? Answer: you don't. You just harp about it at ZH.

Fri, 12/04/2009 - 19:17 | Link to Comment Rainman
Rainman's picture

Ah yes........an excellent primer on Fabian Socialism. It is here, the Fabians have prevailed.

Fri, 12/04/2009 - 17:25 | Link to Comment john_connor
john_connor's picture

Can someone post the official numbers from shadowstats?  I keep on hearing about some BS number put out by a rogue agency.

Fri, 12/04/2009 - 17:39 | Link to Comment Unscarred
Unscarred's picture

Benjamin Disraeli once said there are three types of lies:

Lies, Damned Lies, and BLS Statistics.

Fri, 12/04/2009 - 17:44 | Link to Comment Anonymous
Fri, 12/04/2009 - 17:50 | Link to Comment wgpitts
wgpitts's picture

.

Fri, 12/04/2009 - 17:54 | Link to Comment wgpitts
wgpitts's picture

.

Fri, 12/04/2009 - 17:52 | Link to Comment aces and eights
aces and eights's picture

this is brilliant...too perfect not to share. go mint.com!

Fri, 12/04/2009 - 17:53 | Link to Comment wgpitts
wgpitts's picture

Lying and Manipulating numbers is exactly what the USSR did, telling everyone how great things were and devaluing their currency up until the day they collapsed...It is this administrations official policy to lie to the American people. they call it Behavioral Economics...

How Obama Is Using the Science of Change –

Time Magazine - http://www.time.com/time/magazine/article/0,9171,1889153,00.html

Using Psychology to Save You from Yourself
http://www.npr.org/templates/story/story.php?storyId=104803094

Behavioral Economics and Obama
http://econ4obama.blogspot.com/2008/05/behavioral-economics-and-obama.html

Sunstein to Bring Law & Behavioral Economics to Washington
http://blogs.wsj.com/law/2009/01/08/sunstein-to-bring-law-behavioral-economics-to-washington/

Sat, 12/05/2009 - 01:55 | Link to Comment Unscarred
Unscarred's picture

"Behavioral economics and Obama" - HAH !!!!!!!!!!!  That's like saying Keanu Reeves and Academy Award!

The concept behind behavioral economics is to create incentives for the individual through rewarding economically positive and productive actions, something that this administration does everything but.  We all talk about how it transpires in the financial industry on the pages here at ZH, but lets put it in the context of health care.  Reform is useless if new policies do not align incentives towards improving the health of the individual, and the economic consequences will be horrific should when that component fails to be included in the final bill.

Here’s a perspective from someone who GETS it:

How Safeway Is Cutting Health-Care Costs - WSJ.com

 

Fri, 12/04/2009 - 18:16 | Link to Comment Anonymous
Fri, 12/04/2009 - 18:39 | Link to Comment Anonymous
Fri, 12/04/2009 - 19:07 | Link to Comment Anonymous
Fri, 12/04/2009 - 21:38 | Link to Comment JR
JR's picture

As Mish said today, "the Birth/Death numbers (of businesses) remain in deep outer space.

“At this point in the cycle birth death numbers should have been massively contracting for months. The BLS is going to keep adding jobs through the entire recession in a complete display of incompetence.” (From: Jobs Contract 23rd Straight Month; Unemployment Rate Drop to 10.0%)

also from Mish today:

Small Business Owner Confidence Plunges

Although the Fed and most economic forecasters are all looking ahead to the recovery, small business owners do not seem convinced. Please consider Economic Confidence Plunges; Low Expectations for the Holidays.

Economic confidence among America's small business owners plummeted in November, as more owners cited serious concerns about cash flow and saw economic conditions for their own businesses getting worse. The Discover Small Business Watch index fell 12 points in November to 76.5 from 88.5 in October.

November Highlights:

·  The mood of small business owners generally has soured in November for three straight years, as economic confidence dropped from October to November in 2007 and 2008. The November 2008 index of 67.5 is the low point for the Watch since it started in August 2006.

·  52 percent of owners say they have experienced cash flow issues in the past 90 days, up from 44 percent in October. Forty-one percent of owners say they have not experienced cash flow issues, which is the lowest response in this category since the Watch began. The remaining 6 percent said they weren't sure.

·  53 percent of small business owners see conditions getting worse in the next six months, up from 43 percent in October; while 19 percent report that conditions are improving, a sharp decline from 29 percent in October; 23 percent see conditions as the same, and 5 percent weren't sure.

·  62 percent of small business owners rate the economy as poor, an increase from 55 percent in October; 30 percent rate it as fair, and 8 percent say it is good or excellent.

·  53 percent of small business owners think the overall economy is getting worse, up from 44 percent in October but still significantly lower than the 69 percent of owners who felt that way in February 2009, the last time the Watch index was this low. For November; 28 percent say the economy is getting better, down from 35 percent in October; 16 percent see it staying the same, and 3 percent are not sure.

A majority of small business owners think the economy is getting worse, not better. And if small businesses are not confident, then they are not hiring.

Odds are increasing that Congress will need to pass yet another stimulus package but if so, it will have even less effect than previous ones.

Every stimulus effort shifts demand forward. After enough shifting forward, demand drops to zero.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot

Fri, 12/04/2009 - 22:22 | Link to Comment Anonymous
Sat, 12/05/2009 - 00:27 | Link to Comment Anonymous
Sat, 12/05/2009 - 01:31 | Link to Comment Anonymous
Sat, 12/05/2009 - 05:15 | Link to Comment tetsuotrees
tetsuotrees's picture

What was that saying again?  Perception is everything?

Sat, 12/05/2009 - 11:12 | Link to Comment Anonymous
Sun, 12/06/2009 - 12:55 | Link to Comment Ruth
Ruth's picture

I LOVE THAT VIDEO! 

Talking about the psychology of it all...here's a great piece:

http://www.marketoracle.co.uk/Article8800.html

Very telling .....Thank You ZH!!!  You made my day!!!

 

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