Thursday, February 4, 2010

The following is not so much an analysis of the coming jobs report as it is about the manipulation of the jobs data and statistics. Every new set of economic data that comes out is subject to this review as an ever growing amount of the data seems false and or manipulated  in some form. This has become a sad fact but an ever growing part of what we as traders have come to expect.

QUOTE: From Larry Levin
Will it Matter?

Friday's monthly job-loss report is only a few days away and may be a real shocker.  Will it matter?  At the beginning of October I warned you all that a huge revision of the ridiculously flawed jobs data were coming in February 2010 - this Friday to be exact.

Back then I wrote... "Oh, but it's really worse than that; the BLS has been lying for years via its (business) Birth/Death job revisions.  These estimates are so positive they are laughable.  Since January the BLS has estimated that businesses have birthed hundreds of thousands of NEW jobs above and beyond those that have died/closed.

Uh-huh, sure.

This BS is just another way the government statisticians keep you in the dark about how things really are - at least for a while.  To be fair, the government eventually makes an annual adjustment to these figures, and according the Bloomberg it's gonna' be a whopper."

"The Labor Department today also published its preliminary estimate for the annual benchmark revisions to payrolls that will be issued in February. They showed the economy may have lost an additional 824,000 jobs in the 12 months ended March 2009. The data currently show a 4.8 million drop in employment during that time.

The projected decrease was three times larger than the historical average, the Labor Department said. Most of the drop occurred in the first quarter of this year, probably due to an increase in business closings, the government said."

When the revision detonates like a nuclear bomb Friday morning, again I wonder: will it matter?  My inclination is no.

To be clear, Friday's job-loss data will not include this massive revision; this revision covers the time of April 2008 to March 2009.  In other words, the government is coming clean that is has been straight-up lying to you like a common criminal giving up his larcenous ways.  Well, not really.  It gets worse.

The government has sugar-coated the data every single month for an entire year to make it look better than it really is.  Have you figured out yet that the "birth/death" statistical model of new jobs created over those lost is nothing more than a political game?  And since it is, you can bet your bottom dollar that it will never be changed.

But it gets better!  According to Bloomberg, another revision will come next year and will be an additional 990,000 job losses beyond whatever the government discloses.  Said another way, the "G" is willfully underreporting job losses by nearly 2 MILLION JOBS.

Will that even matter?  Naaaah.

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