BLS Caught Fabricating Wage Data

Tyler Durden's picture

While it's not the first time we have observed the BLS manipulate data (the last time was in "This Is What Happens When The Bureau Of Labor Statistics Is Caught In A Lie"), never before had we actually caught the Bureau Of Labor Statistics openly fabricating data. Until now.

As reported earlier today, in one of the most closely watched statistics in today's payrolls report, the BLS reported that the annual increase in Average Weekly Earnings was a whopping 2.9%, above the 2.5% expected, and above the 2.5% reported last month. On the surface this was a great number, as the 2.9% annual increase - whether distorted by hurricanes or not - was the highest since the financial crisis.

However, a problem emerges when one looks just one month prior, at the revised August data.

What one sees here, as Andrew Zatlin of South Bay Research first noted, is that while the Total Private Average Weekly Earnings line posted another solid increase of 0.2% month over month, an upward revision from the previous month's 0.1%, when one looks at the components, it become clear that the BLS fabricated the numbers, and may simply hard-coded its spreadsheet with the intention of goalseeking a specific number.

Presenting Exhibit 1: Table B-3 in today's jobs report. What it shows is that whereas there was a sequential decline in the Average Weekly Earnings for Goods Producing and Private Service-producing industries which are the only two sub-components of the Total Private Line (and are circled in red on the table below) of -0.8% and -0.1% respectively, the BLS also reported that somehow, the total of these two declines was a 0.2% increase!

Another way of showing the July to August data:

  • Goods-Producing Weekly Earnings declined -0.8% from $1,118.68 to $1,109.92
  • Private Service-Providing Weekly Earnings declined -0.1% from $868.80 to $868.18
  • And yet, Total Private Hourly Earnings rose 0.2% from $907.82 to %909.19

What the above shows is, in a word, impossible: one can not have the two subcomponents of a sum-total decline, while the total increases. The math does not work.

This, as Zatlin notes, undermines not only the labor inflation narrative, but it puts into question the rest of the overall labor data, and whether there are other politically-motivated, goalseeked  "spreadsheet" errors.

We have sent an email to the BLS seeking an explanation for the above data fabrication, meanwhile here is what likely happened: a big, juicy fat-finger error, whether on purpose or otherwise because if one looks at the finalized July weekly earnings of $907.82, it's precisely the same as what the August preliminary wage number was as released last month, also $907.82.  For the excel fans out there, it means that the August totals were simply hard coded when the BLS shifted cells in the spreadsheet, becoming July.

Of course, if the BLS confirms that this was a transposition fat finger error, it would also imply that the August number is in fact, the September data, a rather massive mistake which today has had a impact on trillions dollars worth of assets.

Source: BLS

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nope-1004's picture

I never understood what the "L" stood for.  Should just be BS jobs report.

 

Manthong's picture

 

Oh no!

And here I have been believing everything they have written for years… NOT!

If it wasn’t for fake .gov data, we would have no data at all.

Hugh_Jorgan's picture

This is a smoking gun for what we have all seen for the past 12 years. ALL BOOKS...COOKED ALL OF THE TIME.

idea_hamster's picture

Someone call Pedro DeCosta to see if he knows any Fed-beat reporters who hate their jobs enough to ask Yellen to explain this at the next press conference.

macholatte's picture

 

All your stats belong to us....

Nothing illegal here.
Nothing to see.
Move along bitchez.

 

giovanni_f's picture

It is the data we are spoon-fed by the establishment. That's why in the upper left corner of TABLE B-3 it can be read "ESTABLISHMENT DATA" (see for yourself).

So what do you expect?

NoDebt's picture

"We have sent an email to the BLS seeking an explanation for the above data fabrication."

They'll get RIGHT back to you on that one, Tyler.

Now, I don't work at the BLS, but I bet I know what the response is going to be:  The total number is correct, the error was in one (or both) of the constituent categories.  Anybody want to bet $20 against me on that one?

 

glenlloyd's picture

The BLS data has been rubbish for years.

All the real crap started back in the Clinton years when the marginally employed were erased from the payrolls. Ever since then it's been a slow process of elimination for anything that might turn the number negative.

In all honesty did you really expect them to spend their time doing the work needed to produce real information? Come on, these people sit at their desks and watch porn all day.

Truther's picture

HRC (The Cunt): "What difference does it make?" We came, we saw, we faked, and you died.

 

Have a nice day.

BennyBoy's picture

 

Maybe BLS has merged with the Department of Edumacation.

GUS100CORRINA's picture

BLS Caught Fabricating Wage Data

My response: This CRAP has been going on for over a decade now.

FIGURES LIE and LIARS can FIGURE.

Bastiat's picture

Easy to explain: "rogue analyst."

Paul Kersey's picture

If they are cooking the books, then who is handing them the recipe?

Vilfredo Pareto's picture

So are we at peak yet?  Or does that have to be determined in hindsight? 

 

:)

yogibear's picture

Any slight selling in stocks gets those government people scared.

With any bad news they have to reverse,

All about the stock market folks. It's the only thing they look at these days.

The hell with the real economy.

NO QANA's picture

IT    was I supposed to finishe your word?

 

t0mmyBerg's picture

It is possible there is nothing here.  if that is a weighted average and they significantly changed the weights away from service to goods producing, the average as weighted by the two components could increase even though the two components decreased simply because the goods producing wage is so much higher than the service one.  I would guess that is what happened.  Now whether the change in the WEIGHTING is justified or not who the hell knows.  Probably doubtful

Vilfredo Pareto's picture

That is the beauty of electronic spreadsheets.

 

There are so many potential ways to goal seek.

t0mmyBerg's picture

Just got the Friday Economic Policy Jounral email from Robert Wenzel (a noted Fed foe) which shows money growth upticking for the 6th week in a row to 3.6%.  In it, after explicitly citing this very ZH article, he stated:

"

I just spent 40 minutes on the phone with BLS economists...
[H]ow can the top line: Private Sector show an average weekly gain in earnings when both subsectors are down?
The top line number is weighted by the number of jobs in a sector. A large gain in jobs in subcategories where avg. hourly earnings are above the overall average (even if wages are lower in the subcategory than the previous month) while there is a shrinkage in jobs in below average hour earnings subcategories, will result in the top line being higher than the previous period--even if avg weekly earnings in all categories are down! This is indeed what occurred.
"

 

Now I have no doubt they do goal seek on occasion, especially when their political masters demand it, but this instance IS almost certainly explained by simple math  While I would revel in a true example of BLS manipulation for political purposes, and again I am sure they exist, I am terribly sorry Tylers's but this one aint it

The_Passenger's picture

Do they publish weighting somewhere? Published like this is in my opinion a lack of transparency.

MillionDollarGold's picture

All your stats are belong to us.  Pardon the obscure reference.  :)

MillionDollarGold's picture

All your stats are belong to us.  Pardon the obscure reference.  :)

1033eruth's picture

ZH readers don't find this systemic fraud surprising.  In fact, its expected.  On the other hand, there is complete confidence that the deep state has absolutely nothing to do with the Las Vegas shooting (despite the secrecy).  Instead we get mega tinfoil expanations that a retired, gambling addict converted to Islam at 64, that he accomplished the deed by himself, etc, etc.   Whatever the media reports is gladly accepted for the scenario and this is despite wall to wall fabricated statistics from government which of course affect the bid on all asset classes due to "confidence".

Endgame Napoleon's picture

Way to go, Tyler. Write a book about the Fake Labor Stats. Show the world how and why these "disinterested," bureaucratic number crunchers are just servants of the status quo. Do the MSM's job for them, while they cheerlead for their corporate masters.

Tarzan's picture

Which makes me wonder, with all these reports being faked, what are all these accountants doing all day? They're obviously not crunching real data.

knukles's picture

The expanse, complexity and reach of the Propaganda mechanism is breath taking
Have a nice day in the Matrix, kiddies.

 

Oldwood's picture

But necessary. Without propaganda we would be left with TRUTH, and NO, we (the entitled Americans) can't handle the truth.

1033eruth's picture

The truth is classified.  This is to protect unknown operatives.  Didn't you know that?

A Sentinel's picture

I don't know their exact internal method but if people don't pay attention (and most don't) then you could

Reported. Revised. Change
100. 80. --
100. +25%

To use a gross example. Then revise down and you'll always have as much initially reported value as you want.

The secret would be to layer revision back multiple periods in complex formulas ... sort of keeping the "reveal" happening in slow motion.

If you're "independent" then you are trusted partly because you have no motive to cheat. That's the trouble here perhaps: people assume that.gov has no motive to lie.

1033eruth's picture

Simple people assume that gov has no motive to lie.  Assuring consumer confidence is a very real mission with Uncle Fraud because it keeps the consumer spending.  Hell they even fabricate consumer confidence poll figures to tell us how confident we should be.  

Vicious cycle of which the braindead are unaware.  

NO QANA's picture

LYING     Bulll LYING SHEEET

Froman's picture

Hasn't it always been Bureau of Lying Shits?

all-priced-in's picture

Should be BLSL. Bureau of labor sadistic lies. Actually I said bureau of labor statistics lies but my Apple iPhone corrected it to sadistic which I thought was sort of funny so I left it.

Just Another Vietnam Vet's picture

 
The surprise is that the DOW is actually down 29 points right now today on the fake gov. stats. 

Fake gov stats, fake media news, manipulation of interest rates and  commodity prices. 

Corporate Fraud, and sometime fines.   Been going on for how many  years now ???????

The latest is Equifax and insult to injury is them getting an IRS security contract subsequent to the incompetence. ..

 

Does anyone ever get personally FINED, FIRED or go to JAIL for this stuff  ????????

 

Bryan's picture

Say it ain't so, Joe.   Welp, how's about another S&P rally to new highs into today's close?  The illusion must live on!

Give Me Some Truth's picture

I would hope that there was an entire industry or army of analysts who checked all of BLS's numbers. Perchance even someone from the MSM. They lie/fabricate because they know they can. There have to be dozens of potential whistleblowers in this agency. If only one or two could summon the courage to disclose what they know.

NO QANA's picture

LOLOLOLOLOLOLOLOLOLOLOLOL   You were joking right?  If not, well yes I  too would like to see that.