What news is on your mind today?
Here’s what continues to be on mine, and millions of other Americans.
From the WSJ
“Don’t be fooled by the headline unemployment number of 8.1% announced on Friday. The reason the number dropped to 8.1% from 8.3% in July was not because more jobs were created, but because more people quit looking for work.”
“How many people are out of work but not counted as unemployed because they hadn’t sought work in the past four weeks? Eight million. This is the sort of distressing number that turns up when you look beyond the headline number.”
Read more here
So how do you get a drop when the numbers are this bad? Easy. Fuzzy math. Here’s how.
Drop the labor participation rate, AGAIN!
From ZeroHedge
“Curious why the unemployment rate dropped from 8.3% to 8.1%, even as just 96,000
jobs were added? The labor participation rate declined from 63.7% to 63.5%,
the lowest since 1981.”
Read more here
Add in some seasonal and birth numbers fudging,
“Happy by the headline establishment survey print of 133,245 which says that the
US “added” 163,000 jobs in July from 133,082 last month? Consider this: the
number was based on a non seasonally adjusted July number of 132,868.
This was a 1.248 million drop from the June print. So how did
the smoothing work out to make a real plunge into an “adjusted” rise?
Simple: the BLS “added” 377K jobs for seasonal purposes. This
was the largest seasonal addition in the past decade for a July NFP print in the
past decade, possibly ever, as the first chart below shows. But wait, there’s
more: the Birth Death adjustment, which adds to the NSA Print to get to the
final number, was +52k.
How does this compare to July 2011? It is about 1000% higher: the last B/D
adjustment was a tiny +5K! In other words, of the 163,000 jobs “added”, 429,000
was based on purely statistical fudging.”
Read more here
And voila’, a lower rate, just in time for the election. Funny how that worked out huh? Next time you hear Obama say we need to move “forward”, just remember that we’re standing on a cliff.
Wandering Views 
One thing I believe we can all agree on is that in the consumer driven economy we have, big business does itself no real favors in pocketing its profit. It would seem better for business to re-invest in labor and in so doing shore up consumer spending. It’s not like business is hurting — quite the opposite.
On the statistics which you seem to think have some kind of deceitful twist, the statistical fudging of numbers began in the 80’s. Personally, I’d be impressed if a sitting executive had the courage to tell the BLS to stop deleting the discouraged.
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I noticed that Iran’s president is supposed to address the UN GA on Yom Kippur.
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I think fudging the numbers began way before the 1980, even the 1880s, hence Twain’s oft quoted remark, “There are lies, damnable lies and statistics.”
We need to get out of the UN. Why do we pay dues to an institution that produces nothing and frustrates more often than not?
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Agreed, CB. Another point to be made is the number of people working two to three jobs when the earnings from one job used to be a enough to support a family. Our “job creators” are making record profits while the trickle of jobs that they are creating pay miserly wages and force employees to work more than one job to get by.
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CB, big or small business don’t simply “pocket” profits. They are used for purposes of investment to buy equipment and to expand labor force Profits may, also, paid out in dividends to equity holders including pension funds and charities. They are taxed and help to pay government workers and for social welfare programs.
The most profitable companies are usually the most innovative and creative ones. Apple, a very profitable company, has in America and around the world created over 300,000 jobs; it has also created about over 200,000 outside jobs among iOS app creators.
In a dynamic free market profit is a very valuable and dynamic force that greatly benefits society. I for one could not agree with your proposition that business does itself no real favors in pocketing its profit.
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What Sails said.
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Thank you, Sails.
The statement that some unemployed people have “stopped looking for work” puzzles me. First of all, does it means that someone is taking a survey & asking people if they are still looking for work, or does it mean that a number of folks are no longer showing up at the unemployment office [presumably because they’ve run out of benefits].
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A few minutes after reading CB’s thoughts about businesses pocketing their profits, I came across this story on Fox:
http://www.foxnews.com/us/2012/09/10/retiring-car-dealer-gives-employees-1000-for-every-year-theyve-worked-for-him/?cmpid=cmty_twitter_fn
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Sales,
I had no idea that companies re-invest in such ways …. sigh.
Of course companies invest profits in ways that usually help their bottom line.
My point here is that corporations in not re-investing in the American work force are driving a part of the problem with respect to the consumer basis of our capitalistic country. More simply put, people who don’t have money can’t by company products. So using some of the profit from the most profitable years ever of the past tow years, would pprobably help companies in the long term.
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Kay — that’s a terrific story and props to the dealership. Container store also has pretty good policies with respect to its workers.
CBA — the UN. Much can be and has been written about its faults and flaws. Little is written about what the peacekeeping missions and humanitarian missions do.
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CB, companies are of necessity careful about investing their profits. Just now investment is lagging due mostly to uncertainty about the global economy and to the threat of looming higher taxes due to $trillion plus deficits.
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CB, just to be clear, you do know that many of the shareholders of big businesses are everyday folks who invest part of their paychecks into 401k, Roth IRA, mutual funds, etc., which in turn invest in the big businesses, right?
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Kay
Yes, I am aware of that. I am also aware that many larger corporations are sitting on their cash, blaming the uncertainty as Sales has pointed out. Those corporations that are currently receiving more money from Uncle Sam then they are paying in are most certainly concerned about the tax situation. And those receiving subsidies are without doubt concerned about which parts of their dole will be cut.
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Over half of the new homes that were built in the US last year were built in Texas. Many of my friends are in that industry and related industries. They have confirmed the truth of what Sails said. Uncertainty with regard to the economy, taxes, and potential crazy new regulations is causing employers not to hire. Healthcare costs are causing employers to use contractors rather than hire employees. Some of these employers had to fire over half their employees in 2008-2009 and they don’t want to go through that again.
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CB, The vast majority of employers in my area are not major corporations. They are sole proprietorships, or family owned businesses. The owners of many make over $250,000 per year. They are the people whose taxes Obama wants to increase. They are also people who believe they built their own businesses.
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Ricky
and that’s where the increase may be a bit too much of a bludgeon — of course it all depends on what a big firm is vs. a small firm. In the US a small firm is 500 people or under. Estimates vary but in general firms with fewer than 500 account for 17 percent of job growth in the past couple of years. What we probably ought to do is have lower taxes for young firms/startups — that’s where most of the innovation comes from.
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