Friday, October 5, 2012

Yes, the Household Survey Data is Fake and Has No Basis in Reality

This data is just so laughably fake, it's unbelievable, it's like something a desperate biotech company would do to juice their stock price.  We already know that the Obama administration is not beyond trying to do borderline illegal things to help their chances of re-election.  Just take a look at their recent decision to compensate companies for any judgements and legal fees that are incurred if they violate the WARN act by not notifying workers of job losses before election day. 

Is there any proof?  Well so far ZeroHedge has found some hint, the number of part time jobs added (582,000) is EXACTLY 2/3rds of the total number of total jobs added (873,000).  Not about 2/3rds, not 0.663 or 0.672, it's EXACTLY (according to my calculator it is 0.666666666666667), which is practically impossible (as in a 1 in a quadrillion chance).  Seriously, you would think they would have used 17/23 or something as that at least looks random not a simple fraction like 2/3 that you would use in a model to estimate something that you had no underlying data for.

Also, the data makes no sense because the establishment survey number, which came out concurrently showed an increase of only 114,000 jobs in the same month.  Now there is often a difference between the two surveys but a 759,000 job difference?

Also conceptually, the household job number doesn't make sense as unemployment is not a leading indicator of the economy, it is lagging.  So as an economy slows eventually more people start losing their jobs or at least less are gained.  As we saw with the final number for 2nd quarter GDP, the economy grew only 1.25% during the month compared to 2% in the first quarter.  If you look across indicators and what bellwether companies like FedEx have said, the economy is slowing, not accelerating.  So where did these 873,000 jobs even come from? 

There are really only two choices here, either the Bureau of Labor Statistics is incompetent and made some sort of "fat finger" mistake or the number was made up for nefarious purposes.  It's pretty obvious the estimate has no actual basis in reality.

No comments:

Post a Comment