Was today’s unemployment release another Orwell sighting? Reader (and economist) Gonzalo Lira thinks the numbers were more than a tad tweaked to produce a more palatable result
“We’re leveling off! We’re leveling off!”—so is the hope of Turbo Tim, Helicopter Ben, Larry the Wall Street Lackey and the rest of Team Obama. “This recession is leveling off!”No it’s not: The unemployment figures just released by the Bureau of Labor Statistics are totally cosmetic: We lost a whole lot more than 531,000 unemployed.
First, the “seasonal adjustment”, which is a black box that can tweek me into looking like Dumbo the flying elephant. They’re knocking off ±65,000 workers for no clearly discernible reason.
Second, notice that the Census Bureau hired 60,000 people last month. Those workers (by definition) are temporary, and are a net cost to the economy, as they will not be adding marginal utility to any economic sector, the census being merely a social expenditure.
Those two items alone turn 530,000 new unemployed into 655,000.
Now notice how, once again, previous months’ figures have been readjusted. This time, the readjustments weren’t so bad—a mere 30,000 more unemployed in February, turning that month’s official totals to 681,000, and another 30,000 for March, making that month’s official number 699,000, just shy of that magic 700,000 monthly number (BTW, remember back in the good old days when 300,000 monthly unemployed was “shocking”?)
But notice too: When those more realistic numbers were released, the markets were more or less copacetic—at least they weren’t nervously contemplating another suicidal round of cliff-diving, as we currently are. Ever since the October ‘08 release of Sept. ‘08 unemployment, when arguably the BLS numbers had a role in triggering the sell-off of
that very nasty month, the unemployment numbers have been generally rosy whenever there’s been general nervousness in the markets around the time of the number’s release. I know this sounds crazy-man
paranoid, but bear with me: Every time the markets have been nervous, the BLS numbers look pretty good, or at least not that bad, relatively speaking—and then the next month the figures are very quietly revised, sometimes by as much as 35% on the upward side.I will bet one double Quarter Pounder with cheese and bacon that next month, the revisions of the April numbers will be on the order of an additional 85,000 unemployed. My guess is that, discounting the Census Bureau hirings, April saw 680,000 newly unemployed workers.
That would mean that unemployment isn’t accelerating—but it’s still growing fast enough to scare the hell out of anyone sane. And anyway, what industry or sector of the economy will be able to absorb all of those unemployed workers in the near-term future?
Now wait for May and especially June numbers, when 2 million new college grads can’t find steady work.
This baby ain’t over yet.
Leo Kolivakis 
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Is it not obvious by now?
The Obama plan is centered around letting the banks trade themselves to profitability. Who else could possibly be driving this market into its current delirium?
And if that plan fails, Plan B is to hope people make enough money off market speculation to forget that real jobs are evaporating. I’ve read a lot of commentary on the end of financial capitalism as we know it, but what if it gets WORSE? The rest of the economy is blown to smithereens, so it’s the only horse left in town.
Rather than being the economic game-changer everyone has been talking about, what if this great depression/recession is the final step towards the complete financialization of the economy, when numbers on screens throw off their last tenuous links to that thing some of us call reality?
And what does it matter, right? Money is money as things stand today, whether it is made producing something of REAL value, or whether it is made tracking a line on a screen and pushing a button. The line on my computer screen says up, so everything must be alright.
If that is the preferred exit strategy to this crisis, then we are all in serious, serious trouble. I hope stock certificates taste good. (wait, I don’t think those are even physical anymore either!)