Elaine Chao's "black box" numbers...

[Joanne98]

Unemployment Soars, Jobs Collapse

Birth/Death Model

This was a very weak jobs report. But it is even worse when one looks at Birth/Death Model assumptions.


The BLS should be embarrassed to report this data. Its model suggests that there was a net jobs of 28,000 coming from construction businesses, 44,000 jobs coming from leisure and hospitality, and a whopping 142,000 jobs in total coming from net new business creation.

Virtually no one can possibly believe this data. The data is so bad, I doubt those at the BLS even believe it. But that is what their model says so that is what they report. Just as there is mark to model in the investment world, there is mark to model in the BLS world.

BLS Black Box

For those unfamiliar with the birth/death model, monthly jobs adjustments are made by the BLS based on economic assumptions about the birth of death of businesses (not individuals). Those assumptions are made according to estimates of where the BLS thinks we are in the economic cycle. The BLS will not disclose what their methodology is or even on what it is based. Essentially it is a "black box" with the BLS essentially saying "trust us, we know what we are doing".

The BLS has admitted however, that their model will be wrong at economic turning points.

The latest birth/death numbers appear to be from Mars, Pluto, or France. With housing falling like a rock and homebuilders demanding concessions from contractors, the BLS is assuming that 28,000 new jobs were added in construction and 7,000 new jobs in manufacturing. With subprime lenders blowing up everywhere (going out of business) the BLS is assuming 6,000 new jobs were added in financial activities. The total number of jobs added by such assumptions for February was 142,000 jobs.

http://globaleconomicanalysis.blogspot.com/2008/04/unemployment-soars-jobs-collapse.html

[Viva_La_Revolution]

1. The official government number is 5.1%

but Table A-12 suggests it is closer to 9.1%. I believe that is on the low side.
:(

[Yavin4]

2. The Unemployment Rate, Job Loss Report, New Claims for UE Benefits, GDP, and the CPI (Inflation)....

Are all political numbers, not economic ones. Economic numbers report the truth. Once they get "massaged", they become political numbers, which means that their reporting is for more political purposes than economic ones.