With A Straight Face, US Government "Finds" Number Of Retiring 20-24 Year-Olds Has Doubled

Earlier today we reported that when it comes to one of the most important data series that feed directly into the US GDP calculation, namely construction spending, the US government admitted it had literally made up numbers for the past 10 years. The phrase used was "processing error":

In the November 2015 press release, monthly and annual estimates for private residential, total private, total residential and total construction spending for January 2005 through October 2015 have been revised to correct a processing error in the tabulation of data on private residential improvement spending.

A processing error that lasted for 10 years? And one which, mysteriously, ended up boosting both the construction spending "data" in 2015 and, as a result, the GDP?

Odd coincidence, that.

But nothing compares to the latest farce released recently by the Bureau of Labor Statistics, the same guys whom we caught fabricating jobs data back in September 2013.

As everyone knows, one of the biggest question marks surrounding the US labor market is the 95 million of Americans not in the labor force, resulting in the lowest labor force participation rate since the mid-1970s.

 

The answer to this question is critical because it would explain why despite "5% unemployment", wages in the US stubbornly refuse to rise 7 years after the recession "ended" even as a record number of Americans aged 55 and over have jobs (mostly of the low-paying variety).

Of course, the logical explanation is that due to various generous welfare state support nets, due to "disability" and due to $1.3 trillion in student loans, tens of millions of Americans of all ages have found other options: whether to stay in school for decades, to collect various forms of welfare, or simply because millions have given up trying to find a job since the labor market is not anywhere nearly as strong as the government would like to make it appear (especially after a few hundred thousands US workers lose their jobs after the $5 trillion in global M&A "synergies" hits in 2016), and have dropped out of the labor force entirely.

But, in these trying times, logic does not make sense. So a few months ago, the Atlanta Fed tried to answer this question. Its answer: the labor force is plunging because people simply "don't want a job." No really:

The decrease in labor force participation among prime-age individuals has been driven mostly by the share who say they currently don't want a job. As of December 2014, prime-age labor force participation was 2.4 percentage points below its prerecession average. Of that, 0.5 percentage point is accounted for by a higher share who indicate they currently want a job; 2 percentage points can be attributed to a higher share who say they currently don't want a job.

That "explanation" did not fly with the goalseeking statisticians manning the Arima-X-12 seasonal adjustment vacuum tubes at the BLS, so, as Bloomberg reports, in a new Bureau of Labor Statistics report, these same career economists tired to provide fresh answers to this critical question.

And here we cross in the twilight zone, because while fabricating numbers is one thing, engaging in absolute lunacy as a form of scientific inquiry is a bridge we did not think even the BLS would dare cross. we were wrong.

Here's Bloomberg's summary of what the bureau found, broadly: Thirty-five percent of the U.S. population wasn't in the labor force in 2014, up from 31.3 percent a decade earlier. (You're considered out of the workforce if you don't have a job and aren't looking for one. That's distinct from the official unemployment rate, which tracks those out of work who are actively job hunting.)

Drilling down into the numbers reveals more about the shifts in the reasons some people forego a paycheck. In all age groups, for instance, more people cited retirement as the reason for being out of the labor force, and it wasn't just older people.

So far so good: who knows if this is true or not, but since it is a "scientific" study it probably can be replicated. Unfortunately, not in this case, because here was the punchline:

For Americans between the ages of 20 and 24, the share of those sidelined over the past decade because they were in school increased, unsurprisingly, during the decade that included the Great Recession. What's more unusual is that the share of 20- to 24-year-olds who say they're retired doubled from 2004 to 2014.

 


At this point we stopped reading for one simple reason: the fact that a "scientific" study can "find" that the number of 20-24 who have retired has doubled, shows that those conducting said experiment were simply said lunatics who had set up their experiment and null hypothesis incorrectly, had asked all the wrong questions, and worst of all, given themselves a "sanity check" and passed with flying colors despite something as glaring as this "finding."

What is most troubling is that these are the same economists in charge of "creating" seasonally adjusted, statistically relevant and completely fabricated job number which drive the market month after month. And then, when the bottom falls out of the economy, these same people will at their data and, like with the construction spending numbers, admit it was all a fraud.

And sadly, this takes place every cycle: goalseeked, smoothed garbage data on the way up, then once the bullshit overflows and reality can no longer mask the underlying lies, everything falls apart, and back to square one we go.

We can only hope that we are much closer to the end of this particular cycle, of both business and epic stupidity, one in which waiters, bartenders, and minimum-wage salespeople, or rather figments of a statistician's imagination, are the forefront of the so-called US "recovery."