I buy every month, and I will never, ever sell it as long as people such as Mitt Romney, Paul Ryan, Obama, Biden, Bernanke, and Geithner are in government. I will never sell it. Never. - Marc Faber, Swiss Investor, King World NewsI couldn't let the monthly Non-Farm Payroll Report go by without shooting it down, however an easy target it may be. It's easier than shooting fish in a barrel, really. At first blush on the headlines, in which the supposed number of jobs gained, 96k, badly missed the consensus expectation by 29k, I was shocked that Obama would let the BLS release a number that was that bad on the heels of his big teleprompter reading last night. But then the unemployment rate crossed that tape at 8.1% vs. 8.3% last month and 8.3% expected. It then occurred to me that it was a perfect number for Obama.
Perfect because the supposed jobs "growth" is slow enough to justify a lot more economic stimulus - at least from a political standpoint, certainly not from a law of economics standpoint - and the supposed decline in unemployment rate is the perfect marketing device for Obama. Now, we know there's no such thing as a free lunch, but our Ministry of Truth (Bureau of Labor Statistics) has written a free lunch script that will be heartily consumed by many. It so closely follows the Orwellian script, laid out by George (Eric A. Blair) in the late 1940's, that it's frightening how prophetically accurate his vision was.
Let me shed some truth on the numbers, at least on the statistical vomit thrown at us by the Obama Team. I say this because the data sampling and mathematical calculations used to produce the report are largely accepted as being wildly inaccurate by most who have studied them with an eye for truth and accuracy rather than the goal of public perception management.
The headline number was 96k jobs added in August. Supposedly 103k private sector jobs were added vs. 142k expected. Of that, 87k came from the nefariously fraudulent "birth/death" model. The durable goods manufacturing sector actually lost 17k jobs. The number of people employed in residential construction jobs is down 20k from August 2011. Do you really believe the reports that the housing market has bottomed? Really?
The unemployment rate supposedly dropped to 8.1% from 8.3%. But remember, this number is calculated using the Government's very narrow definition of "those looking for a job" divided by the total workforce. If you can make the numerator decrease relative to the size of the denominator, or vice versa, you can statistically engineer a lower unemployment rate. Follow that? Here's how Team Obama engineered a lower unemployment rate: They claim that the civilian employment workforce (the denominator) declined in size by .2%; however, they decided that the number of unemployed declined by 2%. Voila! A smaller numerator relative to the change in size of the denominator!
All of the hypothetical action in the employment numbers can be found here: LINK The saddest part of this is that the casualty in these calculations - a casualty of which zero reporting is done by the mainstream media - is the labor force participation rate, which is the number of people working or want work as a percent of the definitional workforce. This metric declined to 63.5% - the portrait of a tragic and catastrophic decline in the number of people who actually work in this country.
Where do the rest go? Well, in the context of all the entitlement programs run by the Government and financed by the Taxpayers, the Chinese and the Japanese, 165 million people in this country are to some degree dependent on Government handouts to make ends meet: LINK Last month under Obama's stewardship, food stamp usage spiked up to a new record: LINK Did Barack happen to mention that metric in his full-of-bullshit speech last night? I've discussed the Social Security disability program on this blog. The number of people, and especially younger people, claiming disability and sponging off this program has climbed significantly under Obama. I'm dead serious about this, about all you have to do is claim chronic head-aches that prevent you from working and you can qualify. And I know a doctor who tells me new medicaid horror stories every time I see him. Did Obama happen to mention that? Finally, this one really blew my mind: the Government announced recently that it will be giving $100 million to States in order to prevent State Governments from laying off employees: LINK Ummm, did Obama happen to mention that? Talk about getting paid not to work...I guess these facts didn't scroll across his teleprompter.
The reason Obama has ramped up the entitlement programs and Student Loan lending is that any new recipient of something like social security disability or a SLMA guaranteed student loan immediately gets dropped from the Labor Force metric. The amount of SLMA loans has soared to $1 trillion during the last 4 years. This will be more defaulted debt guaranteed by the Government. These programs enable the Government to somewhat justify showing a smaller number of unemployed and a lower unemployment rate. The rest is statistical fairy tales told with a very Orwellian spin. Even the Government's own U-6 report, buried in the BLS report, admits to a more realistic unemployment number of 14.7% Newspapers and cable news shows will not report this number. Given the bulge in the various entitlement program participation, I would bet the true unemployment number is north of 20%. As many know, John Williams (Shadow Statistics), calculates an alternative unemployment number which is north of 20%.
Have a great weekend, it's the start of NFL football!!!!