Unemployment Statistics: It’s A Complete Farce!

- It’s A Complete Farce!
by http://truthingold.blogspot.ca/
Statistics are what the powers that be want you to believe them to be, nothing more and nothing less – Kerry Lutz, founder of the FinancialSurvivalNetwork
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With regard to the quote above, Kerry Lutz had me as a segment guest on his FinancialSurvivalNetwork radio broadcast. The topic was fraudulent Government statistics and you can listen to it here: LINK
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I honestly don’t know how Obama gets up in front of crowds today and claims that the economy is getting better and that jobs are being created. I find it exceedingly hard to believe that he doesn’t know the truth about the Bureau of Labor Statistics preposterous calculation of the monthly non-farm payroll report. I find it even harder to believe that anyone with functioning frontal lobes would believe the absurd “report.” It is a complete farce that CNBC/Fox Business/News/CNN and all other media sources discuss and debate this particular Government economic statistic as if it has any semblance of credibility.
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The Government reported this morning that the economy produced 171,000 new jobs in October, well in excess of the average estimate of 125,000 – the latter number a nonsense estimate based on highly manipulated data, the former a fantasy beyond any remote rationalization.
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The primary driver of the employment report today was the nefariously mysterious “birth/death model.” For today’s particular report, the birth/death model contributed 90,000 jobs to the Government’s statistical stew. Let’s take a look to see exactly what this is and how it is applied. The metric is supposed to measure employment growth created from new business formations net of business “deaths.” Here’s the key definitional sentence from the BLS website:
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The sample-based estimates are adjusted each month by a statistical model designed to reduce a primary source of non-sampling error which is the inability of the sample to capture, on a timely basis, employment growth generated by new business formations.
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To save you all the brain damage from translating that sentence, here’s what it means: “A primary source of non-sampling error” means that the Government has no possible way of figuring out how many, if any, new businesses were formed during the period of time when the Government worker bees were calling around to try and figure how many people were actually hired and fired in the previous month. The data gathering for this comes from sampling about 1/3 of all Unemployment Insurance tax accounts. You can read all about the birth/death model here: LINK
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Essentially, what the Government is doing is using a small universe of businesses that contribute to the unemployment insurance program to determine the extent to which new accounts were opened and closed. Then it extrapolates out from that based on some unexplained statistical model the number of new jobs, net of jobs lost, that were created by the private sector from new business being formed and closing. Essentially the Government is “imputing” the number of new jobs that were created from an “imputed” number of new businesses that the Government thinks might have been started during the previous month. I am begging someone to explain to me how this can be even remotely accurate.
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The word “impute” (“imputing”) is actually used in the BLS’ description of the birth/death model. Here’s the dictionary of the word “imputation” in reference to its use in business: “to give (a notional value) to goods or services when the real value is unknown.” In short, to make it up when you don’t know the truth and you don’t have verifiable data.
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