The government would like us to believe the story of America’s job growth is simple. Job numbers exert significant influence on perceptions of economic health, but the government would prefer if we didn’t look too closely at the data or how they present it.
I caught this podcast by Peter Schiff delving into the murky waters of government economic reporting.
According to the government, non-farm payroll numbers blew past expectations in January. The estimate was for 170,000 jobs and the government reported 353,000 jobs, more than double its estimate. Meanwhile, the unemployment rate fell from 3.8% to 3.7%.
Yay! Go back to your shopping now!
Even manufacturing jobs perked up, adding 23,000 jobs instead of the 5,000 the government expected.
Wow, that’s one of the biggest increases in manufacturing jobs in my lifetime.
What? Manufacturing is in a recession and all other manufacturing numbers look awful? So where’d all these manufacturing jobs come from?
Schiff pointed out a peculiar pattern he’s noticed before. I noticed it too — back in the Obama administration. The government reports a much stronger number at first and everybody dances a jig. Happy days are here again. Whoohoo! But then, a week or two later, they quietly revised that number. The economy wasn’t as good as they thought.
Shhhh! We don’t want anybody to know the truth!
But then the non-farm payroll report threw a curveball with an unexpected upward revision.
That seems convenient…like really…oddly…convenient.
I mean, people were just complaining about this pattern and now the revision was way above what was reported initially.
Yay! Happy days are here again!
Which Numbers to Believe?
Hold up! This abrupt change in pattern is calling the reliability of the reports into question. Schiff highlighted the stark contrast between government-reported job growth and figures from private entities like ADP and Challenger. They’re surveying the same jobs that the federal government surveys in the private market (they aren’t interested in government jobs). And they report 107,000 private-sector jobs in January and 158,000 in December.
Wait? How is the government counting so many more jobs than the private sector?
Well, the government does specialize in inflation, so yeah — you should wonder which report you can trust. The private sector company has nothing to gain by reporting the true numbers, but the government has an agenda — to report strong jobs numbers, so the American people will vote them back into office in November.
Schiff also notes something that is glossed over in the government reports. There was a large decline of fulltime jobs offset by a gain in partime jobs. Almost all the jobs being added over the last year were parttime jobs.
Ouch! So maybe the economic outlook isn’t as robust as the government wants us to believe. A shift toward parttime work from fulltime employment points toward underlying economic weaknesses.
But don’t worry. Uncle Joe says the economy has never been healthier.
Who are you going to believe?
Do you trust the government more than what you can see with your own eyes? How about what a private company with nothing to gain by distorting the numbers says? Well, when the government has an agenda….
Lela Markham is an Alaska-based novelist and commentator, who pretty much doubts everything the government reports. If you don’t get an immediate response to a comment this week, it might be because she’s traveling. She promises to get back to everyone when she has internet.