Bureau of Labor Statistics

A Quick Glance At Real World Inflation

The Casey Report provides a useful glance at the real inflation currently ravaging items that are actually purchased by Americans, not those captured by the Fed's BLS statistics: "On average, our basic food costs have increased by an incredible 48% over the last year (measured by wheat, corn, oats, and canola prices). From the price at the pump to heating your stove, energy costs are up 23% on average (heating oil, gasoline, natural gas). A little protein at dinner is now 39% higher (beef and pork), and your morning cup of coffee with a little sugar has risen by 36% since last October." Of course, the ongoing deflation in items purchases requiring leverage will continue to skew the CPI so far south to make all those who bought 5 Year TIPS yesterday at negative yields end up losing money on the transaction.

Guest Post: iDepression 2.0

A little reality about the job situation in this country is in order. The unemployment rate reported by the Bureau of Labor Statistics and parroted by the mainstream media is currently 9.6%. Once you stop counting people who have given up looking for jobs and “left the workforce”, discouraged workers, marginally attached workers and workers forced to work part-time, you magically get a 9.6% rate. Using the method of measuring unemployment used during the Great Depression and reproduced by www.shadowstats.com, the real unemployment rate is a depression-like 22.5%. The peak unemployment rate during the Great Depression was 25%. There is no doubt that we are in the midst of 2nd Great Depression, but where are the bread lines and the lines of unemployed winding around the corner? No need. This is the electronic Great Depression – iDepression 2.0. Your 99 weeks of unemployment and food stamps are direct deposited into your bank account so that you don’t have to leave the comfort of your McMansion that you haven’t made a mortgage payment on in the last 14 months. There were no credit cards in 1933. Without a job or a house, you needed to move to where there might be a job. Hence the mass migration from the Midwest to California – ala The Grapes of Wrath. Today, a neighbor in a matching McMansion down the street, with the perfectly manicured lawn, could be unemployed for three years and no one would ever know. They could sustain themselves on unemployment payments, food stamps, and credit cards. Welcome to the iDepression 2.0.

It All Starts And Ends With The USD

There is basically nothing new to add to the picture. Maybe that is why the only thing going on right now is an unabated selling of volatility in both Fixed Income and Equities. The NFP number was slightly disappointing though not horrendous, just enough to convince people we do get QE 2.0 in November and not bad enough to send people into panic. Meanwhile we did get confirmation that 2009 employment figures were in fact worse than reported... in typical BLS tradition one might add. And I thought econometrics models were supposed to have an average deviation of 0 to the series they track! I guess you don't need a statistical backgroup to work at the Bureau of Labor Statistics. - Nic Lenoir

BLS Issues Update On Perpetual Upward Data Bias: 366,000 Overestimate For Year Ended March 2010

The BLS, as part of the NFP report, has issued its preliminary estimate of the benchmark revision, which confirms that the BLS is really just BS. According to the report, for the period ended March 2010, the BLS has overestimated jobs by 366,000 (0.3%), or just over 30K jobs per month. While not as bad as the prior benchmark revision of almost one million for the period ending March 2009, this continue to be a blow to both the credibility and the data tracking capability of the US Bureau of Truth. By industry, the biggest hit was to the trade, transportation and utilities industry (-144K), Manufacturing (-114K) and Leisure and Hospitality (-91K). Luckily, losses in these critical sectors were offset by even more bankers than had been previously expected: Professional and business services ended up being revised higher by 14K.

ADP Plunges To -39K, Well Below Expectations Of +20K

ADP printed at a massive miss of -39K compared to a median consensus of +20K (range of -44K to 75K) . And the cherry on top: the previous number was revised from -10K to +10K, for a monthly swing of a whopping 49K. Everyone hoping for one last pre-midterm NFP hurrah this Friday will be disappointed, unless the Beijinigization of US data is now complete. Of course, this means QE2 is now all but certain. Elsewhere, USDJPY drops solidly to pre-intervention territory, printing at 82.70.

williambanzai7's picture

As you may be aware, recent intelligence reports have resulted in a heightened threat alert for financial services terrorism. All citizens have been duly warned to maintain an appropriate state of vigilant awareness and to adopt appropriate financial counter measures.
How does one identify a financial services terrorist and what counter measures should be adopted?

Explaining The Massive Shell Game That Is The Petrobras IPO

Last week, to much pomp and circumstance, Petrobras IPOed in a $69 billion offering of stock, which was promptly praised by Brazil president Lula as the "the biggest equity offer in the history of capitalism." Yet when one digs through the numbers it becomes glaringly obvious that not only was the "real" IPO one third the size of the vaunted amount, but that a major part of the offering is nothing less than a major shell game, which not only distorts the perception of end demand for the offering for other, more naive investors, but also allows the Brazilian government to lie in open public that it has met its primary account surplus of 3.3% of GDP. Market News has broken down the math works behind what is quickly becoming the biggest act of diversion since the days of Houdini.

Bill Gross Proven Half Right (For Now): Fed's Kocherlakota Just Reduced His 2011 GDP Forecast From 3.0% To 2.5%

A week ago we wondered how it was that Pimco's Bill Gross, who is now rumored to be Larry Summers replacement as the QE infinity whisperer on the right side of President Obama, had an advance look into how the Fed will adjust its GDP forecast ahead of the general public. Today, we got the first half of the response: in a speech to the European Economics and Financial Centre in London, Minneapolis Fed president Narayana Kocherlakota has just lowered his GDP forecast from 3% to 2.5%. And most importantly, the Fed President's speech in decidedly QE-negative: our favorite quote on QE from a Fed president so far: "The Fed cannot literally eliminate the exposure of the economy to the risk of fluctuations in the real interest rate. It can only shift that risk among people in the economy. So, where did that risk go when the Fed bought the long-term bond? The answer is to taxpayers." Thank you Fed.

A Tale Of Two Distributions; Or Are These The Economic Numbers The BLS Now Openly Makes Up?

A funny thing happened on the way to American central planning: normal distributions became abnormal. To wit - the classical, Gaussian distribution chart, which lies at the  basis of all modern statistics and offshoots thereof, such as quant theory, apparently is not good enough for the wonderful data aggregators and distributors at the all important Bureau of Labor Statistics, which is in charge of such key economic metrics as the unemployment rate, CPI, PPI, home sales, and virtually everything that tends to have a huge headline impact on stock futures (because let's face it, nobody trades during regular hours anymore). Curiously of the 25 or so data items tracked by the BLS, the vast majority have been revised over 50% of the time over the past decade. All, that is, expect for the most important, and politically critical ones: the unemployment rate (easily the only number the vast majority of the population understands), and consumer prices (which is the only number to direct impact the federal budget). In other words, as the chart below demonstrates, while the BLS has the track record of a blind and retarded monkey throwing a dart at a wall full of numbers when presenting initial economic data, something which Gaussian distributions would say is perfectly normal when running a $13 trillion economy, it has perfected confidence intervals and data estimates when dealing with the most economically sensitive and critical data. Whether the BLS has hired the same oracular prop traders that allowed Goldman to lose money on zero days in Q1 when calculating some numbers (but not others), or whether the BLS just spews forth what some excel model dictates (possibly the same used by Moody's that would crash upon imputing negative growth assumptions), while pretending to use traditional "ecostat" sampling, estimating and adjustments may be worthy of far more debate than currently afforded. Because the last thing an increasingly more cynical American public would want to believe is that the government is, gasp, lying to it.

US CPI Prints 0.3%, In Line With Expectations, Core Unchanged As Inflation And Deflation Offset Each Other

Overall a boring release, as the CPI print came in just as expected, with energy and gas contributing to the increase. Of course, with biflation now the topic du jour, where things needed are surging in price, and thing unneeded are plunging, it is only expected that the average won't change much. Overall, CPI came in at 0.3%, as expected, compared to 0.3% previously. Core CPI was at 0.0%, just below expectations of 0.1%... At least it was not outright deflation. Regardless, whatever the result would have been, it is bullish for the 4 people passing hot potatoes.

Visualizing The Propaganda "Error Term" Behind The Bureau Of Labor Statistics

Today's announcement by the BLS that it decided to flat out estimate nearly a third of all initial jobless claims (courtesy of several large outliers) due to a "clerical holiday" which resulted in a major beat to estimates, caught many offguard by just how tendentious and manipulative the US Department of Truth can be. This is nothing. To visualize just how ridiculous the perpetual upward bias is at the Labor Bureau, we present a chart demonstrating the weekly jobless claim revisions by the BLS: in a nutshell, 90%+ of the time the bureau has revised prior claims upward, meaning it consistently strives to create an optimistic picture at the moment, only to have it revised it to its true, uglier state a week later when nobody cares. The implication is that fraudulent (and we sure hope this is inadvertent, although a 90% error rate definitely would invite a criminal investigation into just who and how stands to benefit from such an manipulative upward bias) data reporting is responsible for a persistent upward bias in data, and that fundamentals have been disconnected from the "government's reality" for years, confirming that the recent pathological breakdown in the market's relationship with fundamentals is not a new development. For example: today stocks would be flat to down if the BLS were to report the initial claims as they really are. Instead, here we are, almost 1% higher on nothing but soon to be revised lies. In other news, the China-US data distribution Joint Venture/Vassal State development is progressing better than expected.

Minneapolis Fed's Kocherlakota Admits The Fed Is Now Powerless To Solve Unemployment Deriving From Job Mismatch

The Minneapolis Fed's recent addition, governor Kocherlakota, gave a speech in Missoula, Montana in which he noted the obvious, that GDP growth and inflation are both starting a decline which, if Goldman is right, will end up very close to breakeven to zero, and most likely will be materially lower. The one part of his speech that bears highlighting is his discussion on the ever deteriorating employment picture, which he classified as "disturbing."What Kocherlakota focuses is the topic of mismatch, which he classifies as follows: "There are many possible sources of mismatch—geography, skills, demography—and they probably interact in nontrivial ways." And on the topic of mismatch, the Fed governor admits that the Fed is hopeless to fix it: "The mismatch problems in the labor market do not strike me as readily amenable to the kinds of monetary policy tools currently available to the Fed." We wonder how long before the Fed realizes that not just the mismatch component of unemployment, but all of it, is not "amenable to monetary policy" tools, now that ZIRP is in session. And yes, fiscal policy during a time of structural unemployment can only provide temporary pull-forward boosts, such as the census and other Cash-4-Clunkers type programs. In other words, 10%+ unemployment is coming and will be here to stay.

August Total Non Farm Payrolls Come At -54K On Consensus Of -105K, Unchanged From July, Unemployment Rate 9.6%, Birth Death Adds 115K

Private payrolls come in at +67K as Birth Death adds 115K, compared to just 6K previously, as U-6 rises from 16.5 to 16.7%, highest since April. Total Part time workers (all industries) increased by 401k from 18,157 to 18,558; part time workers for economic reasons increased by 331K. Workweek unchanged month over month at 34.2 hours, with average hourly earnings up slightly from 0.2% to 0.3%. 42% of the unemployed were out of a job for 27 weeks or longer, compared to 44.9% previously; average duration of unemployment at 33.6 weeks.