Powell Admits The Biden Admin Is "Overstating" Jobs

Tyler Durden's Photo
by Tyler Durden
Thursday, Jun 13, 2024 - 11:44 AM

Every first Friday of this year (here, here and here) we have spent hours deconstructing the glaring propaganda peddled by Biden's Labor Department, meant to show just one thing - how "strong" the economy is under the current administration - and exposing just how ugly the underlying labor data truly is. Last Friday's nonfarm payrolls was the most recent case in point: for those who didn't read our extended analysis titled "Inside The Most Ridiculous Jobs Report In Years", which dissected the laughable claim that the US added 272K payrolls (more than the highest estimate), here is what we found.

While the Establishment Survey did indeed report that 272K "jobs" were added, this number also included multiple job holders; stripping those out, we get that the actual number of "employed" workers plunged by 408K...

... which is also why the unemployment rate actually went up to 4.0% for the first time in over three years, despite this marvelous "increase" in payrolls. More importantly, it means that gap between the always upward sloping (and market moving) Establishment Survey - which counts the number of payrolls - and the flatlined Household Survey - which counts the number of actually employed workers - which hasn't made a new high since late 2023 and is back to where it was last summer, is now a stunning 9 million, the biggest on record.

But how is it possible that payrolls rose nearly 300K while overall employment tumbled by more than 400K? Well, this is where another propaganda gimmick so frequently abused by the BLS comes into play: the birth death adjustment, a statistical fudge factor that imputes job growth for any given month based on the entirely subjective assumption made by a group of pro-Biden bureaucrats of how many new businesses were created (or destroyed) in the US economy any given moment. Well, in May, the Birth/Death adjustment - recently exposed by none other than Bloomberg - "added" 231K payrolls to the pre-seasonally adjustment number; more astounding is that the Birth-Death imputation has resulted in 56% of all "payroll growth", or 1.9 million statistical "payrolls" in the past year, when according to the BLS a total of 3.4 million "payrolls" were crated.

There's more. While one can debate the quantitative aspects of the jobs report, there is no debating the qualitative: there it's one giant disaster: as we learned in May, whatever the actual number of payrolls (again, not jobs) added, what we know is that the trend of full-time to part-time worker conversions continues, with 625K full-time jobs lost in May, offset by 286K part-time jobs....

... which is hardly a new trend: in fact, over the past year, the US has lost 1.2 million full-time jobs, replaced with 1.5 million part-time jobs.

Finally, there is the data point which we first highlighted more than a year ago, and which has since emerged as the biggest political talking point involving the labor market: the fact that since 2018, the US has created exactly zero native-born jobs, and all the job growth has gone to foreign-born workers...

... and which as Standard Chartered confirmed last week, means almost entirely illegal aliens.

There is much more in our full discussion of the latest jobs report, but you get the idea: every so-called "strong" jobs report has been a disaster if one puts in even a little work to dig below the pristine, if fake, surface. And while we expected this charade to continue indefinitely, and certainly at least until the November election, at which point suddenly all the truth about the ugly labor market would be revealed to usher in the new president amid an economic crisis, we were shocked when none other than the Fed chair admitted today that the Biden admin was rigging jobs data.

In response to a question from a Bloomberg journalist during the post-FOMC presser, asking the Fed chair to comment on the state of the labor market, the Fed Chair said that two years ago the labor market was "overheated" and has since gotten back to "normal", largely thanks to "supply from to immigration" - translation: illegal aliens have been the main reasons for the increase in employment and the drop in wages and thus, overall inflation, which as we discussed recently, is the narrative that is being pushed out to mitigate demands by most Americans to halt illegal immigration.

Where things got very interesting, however, is when Powell was discussing the demand-side of the labor market: here, he addressed the dropping quits level, the decline in job openings and wages, but more importantly, the rising unemployment rate - from 3.4% to 4.0% which clearly goes against the narrative of red hot payrolls -  all of which the Fed chair summarized as strong job creation, yet caveated by saying that "there is an argument that [payrolls] may be a bit overstated."

Note: he didn't say "understated" because the "-stating" always goes in just one direction: the one that makes the resident of the White House look good.

In other words, the jobs - like so many things about this Potemkin economy - are a lie, and while Powell immediately realized what he had said, and tried to couch it by adding that payrolls are "still strong", suddenly the entire narrative of a strong labor market imploded in front of our eyes, because if the Biden admin will lie about a "bit" of the jobs report, it will lie about any part of it.

And, as we have shown above and every month this year, lie is precisely what the Biden administration has been doing, month after month, year after year.

And the biggest stunner, as Edward Snowden put it so eloquently, is that he's "not sure I've ever seen the chairman of the Federal Reserve publicly accuse the White House of cooking the books on employment numbers, but here we are."

We couldn't have said it better ourselves.

Fast forward to 1'40" into the clip below the remarkable soundbite.