This morning the government released the employment report for April. On the surface, the report is filled with good news which I hope is true. I have to say, however, that there are some aspects of the report which are so bizarre that they call into question the validity of the numbers.
First of all, the good new is that close to 290,000 jobs were "created" during the month and the unemployment rate tumbled to 6.3%. The problem is that the unemployment rate went so low because supposedly 800,000 people stopped looking for work and just gave up in April. In other words, during a month when the report says there was robust growth in jobs, 800,000 people became so disgusted that they just gave up looking for work. And remember, that 800,000 figure is a net number. In April, as in any other month, there is normally an increase of between 150,000 and 200,000 people in the workforce. That means that according to today's report, despite the creation of a large number of new jobs, something close to one million people dropped out of the workforce. It makes no sense.
Then you must add on top of this, the very slow growth of the economy during the first quarter. From January through March, even the government says that we had a no growth period. Officially, the economy grew at an annual rate of 0.1% but that growth was entirely due to increased government spending. Did a private economy that was contracting for the last three months suddenly start to boom and create jobs left and right? Again, it just makes no sense.
Normally, the only response to these numbers would be to say to wait until more data came in so as to clarify where the economy is headed. These are not normal times, however. We know that in 2012, prior to the presidential election, the people involved in compiling the data on which the employment reports are based were directed to "fix" the data. In other words, workers in at least the Philadelphia region made up data that made the results look better for president Obama. Could this be happening again, this time with an eye to November's midterm elections? I have to say that this is a possibility, particularly given the conflicting nature of much of the data.
Think of it this way. If an elderly patient went to see his doctor and told the doctor that he felt great and had new energy and vigor but then was shown to have a fever of 103 and extremely elevated blood pressure, would that be good news or bad? It is much the same for the economy. We have good news and bad news that ought not coexist. Did someone phony this up?
First of all, the good new is that close to 290,000 jobs were "created" during the month and the unemployment rate tumbled to 6.3%. The problem is that the unemployment rate went so low because supposedly 800,000 people stopped looking for work and just gave up in April. In other words, during a month when the report says there was robust growth in jobs, 800,000 people became so disgusted that they just gave up looking for work. And remember, that 800,000 figure is a net number. In April, as in any other month, there is normally an increase of between 150,000 and 200,000 people in the workforce. That means that according to today's report, despite the creation of a large number of new jobs, something close to one million people dropped out of the workforce. It makes no sense.
Then you must add on top of this, the very slow growth of the economy during the first quarter. From January through March, even the government says that we had a no growth period. Officially, the economy grew at an annual rate of 0.1% but that growth was entirely due to increased government spending. Did a private economy that was contracting for the last three months suddenly start to boom and create jobs left and right? Again, it just makes no sense.
Normally, the only response to these numbers would be to say to wait until more data came in so as to clarify where the economy is headed. These are not normal times, however. We know that in 2012, prior to the presidential election, the people involved in compiling the data on which the employment reports are based were directed to "fix" the data. In other words, workers in at least the Philadelphia region made up data that made the results look better for president Obama. Could this be happening again, this time with an eye to November's midterm elections? I have to say that this is a possibility, particularly given the conflicting nature of much of the data.
Think of it this way. If an elderly patient went to see his doctor and told the doctor that he felt great and had new energy and vigor but then was shown to have a fever of 103 and extremely elevated blood pressure, would that be good news or bad? It is much the same for the economy. We have good news and bad news that ought not coexist. Did someone phony this up?
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