Drilling beneath the BLS Headlines

One of the fascinating things about the US Goverment’s data producers, including the BLS and the BEA is that they don’t seem to hide anything.

While conspiracy theories may be sexy, the reality is far more mundane. Its all there if you have the temerity to dig thru endless data (eternal vigilence and all that). This must be terribly disapppointing to the black helicopter/tinfoil hat crowd.

The amazing thing is that most people don’t bother. By "most people," I am referring to the economists, journalists, strategists and fund managers who trade off of this data.

So let’s do a little digging, and see if any nuggests of gold might be buried amongst the dirt:

• Once again, we see the Birth Death adjustment — thats the hedonic guesstimate which supposes the number of new jobs created by businesses so new they have yet to be measured — actually exceeded the number of new jobs. This month, its 184k. That’s about on par with last June’s B/D adj.

Note that this adjustment is not a one for one type — it goes into the BLS model further upstream in the massaging process. Regardless, its still a substantial number.

Household survey shows another 240,000 people left the Labor Force last month. That’s greater than either survey’s number of newly employed. The Civilian labor force participation rate actually decreased this past month. We still see unemployment going down because more people are dropping out of the labor than obtaining new jobs. That’s hardly cause for celebration.

U-6, the broadest measure of unemployment, actually ticked up to 9.0%. This measure includes:  Total unemployed, plus discouraged workers,
plus all other marginally attached workers, plus total employed part
time for economic reasons.

• Lastly, here’s an oddity I just noticed:  The jobless rates by race shows that Whites are no longer enjoy the lowest unemployment rate — that pleasure now belongs to Asians:

Asians: 4.0%
Whites 4.3%
Hispanics 5.8%
Blacks 10.3%

I don’t recall when that first occurred, but it would be interesting to track down. The chart on this (Household Data, Table A-2) only goes back to May 2005.

The headline data may appear benign, but digging beneath shows a less than robust economy. Not awful — just not as rosy as the scenario painted by the cheerleaders . . .

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