Guest Post by Paul Craig Roberts
The Bureau of Labor Statistics announced yesterday that the US economy created 271,000 jobs in October, a number substantially in excess of the expected 175,000 to 190,000 jobs. The unexpected job gain has dropped the unemployment rate to 5 percent. These two numbers will be the focus of the financial media presstitutes.
What is wrong with these numbers? Just about everything. First of all, 145,000 of the jobs, or 54%, are jobs arbitrarily added to the number by the birth-death model. The birth-death model provides an estimate of the net amount of unreported jobs lost to business closings and the unreported jobs created by new business openings. The model is based on a normally functioning economy unlike the one of the past seven years and thus overestimates the number of jobs from new business and underestimates the losses from closures. If we eliminate the birth-death model’s contribution, new jobs were 126,000.
Next, consider who got the 271,000 reported jobs. According to the Bureau of Labor Statistics, all of the new jobs plus some—378,000—went to those 55 years of age and older. However, males in the prime working age, 25 to 54 years of age, lost 119,000 jobs. What seems to have happened is that full time jobs were replaced with part time jobs for retirees. Multiple job holders increased by 109,000 in October, an indication that people who lost full time jobs had to take two or more part time jobs in order to make ends meet.
Now assume the 271,000 reported jobs in October is the real number, and not 126,000 or less, where are those jobs? According to the BLS not a single one is in manufacturing. The jobs are in personal services, mainly lowly paid jobs such as retail clerks, ambulatory health care service jobs, temporary help, and waitresses and bartenders.
For example, the BLS reports 44,000 new retail trade jobs, a questionable number in light of sluggish real retail sales. Possibly what is happening is that stores are turning a smaller number of full time jobs into a larger number of part time jobs in order to avoid benefit costs associated with full time workers.
The new reported jobs are essentially Third World type of jobs that do not produce sufficient income to form a household and do not produce exportable goods and services to help to bring down the large US trade deficit resulting from jobs offshoring.
The problem with the 5% unemployment rate is that it does not include any discouraged workers. When discouraged workers—those who have ceased looking for a job because there are no jobs to be found—are included the unemployment rate is about 23%.
Another problem with the 5% number is that it suggests full employment. Yet the labor force participation rate remains at a low point. Normally during a real economic recovery, people enter the labor force and the participation rate rises.
The bullion banks acting as agents of the Federal Reserve used the phony jobs number to launch another attack on gold and silver bullion, dumping uncovered shorts into the futures market. The strong jobs number provides cover for the naked shorts, because it implies an interest rate hike and movement out of bullion into interest bearing assets.
If the US economy were actually in economic recovery, would half of the 25-year-old population be living with parents? The real job situation is so poor that young people are unable to form households. See: http://www.paulcraigroberts.org/2015/10/29/us-on-road-to-third-world-paul-craig-roberts/
Gold is their enemy; keep stacking
It is sad that even articles that correctly point to the problem of today’s economy do not mention the elephant in the room…
THE SIZE AND SCOPE OF GOVERNMENT.
The CEO’s of Wall Street did not do this, the FED do not, nor the politicians…the AMERICAN VOTER did this. They are getting exactly what they voted for…BIG GOVERNMENT and SMALL ECONOMY.
The CEOs, FED and politicians LOVE BIG GOVERNMENT and are enjoying the voters support!
Obama speaks lies all the time and fools the Useful Idiots all of the time but he can’t fool PCR any of the time. Obama says evil is good and good is evil. He binds the Useful Idiots with lies. And ye shall know the truth, and the truth shall make you free. John 8:32
Size of workforce is the number to watch.
Unemployment rate and created jobs are actually phony and manipulated figures, but the number actually working full time reflects employment reality.
Phony jobs numbers? Here is a boots on the ground view from myself.
I just hired someone with a 4 year degree that cannot find a job. She has to go to school longer for any chance of a job in her field but respectable . She is broke and looking for ANY opportunity to make a living. In a crew of exactly 38 she is not even remotely the individual with the most education . And I run a restaurant . Everyone that is over the age of 21 tells me it is scary employment environment out there. Making do with 2 or 3 part time jobs with no benefits at all . They look at me in shock when I say your hired at full time with benefits that are very very decent . Altho the restaurant industry is not for everyone, it can be modestly lucrative .
And barring the occasional run ins with psychopaths or sociopaths lol you can indeed progress based strictly on your own efforts.
@gm: Rots of Ruck when buying groceries, Rx, medical care and other necessities of life leave people to to eat at home rather than go out.
There will be bunches of PhD’s, Engineers, Scientists, technicians and such (with gobs of education) out of work “real soon now” when the Feds stop supporting the defense and science industries as the funny money just quits having any value.. When the Social Security Ponzi falls apart, either what people are paid is worthless or they just quit pretending and allow the old, poor, sick and retired to starve (they won’t be eating out at your restaurant either).
MA
upvoted you Muck , your sorta right . I teach my management staff to have a Plan A,B,C and D
for all eventualities , including what you stated . A fair portion of my staff are also aware and surprisingly well stocked for most eventualities.
If TSHTF , would you think that I, as their teacher ,would not also have A thru D set up ? Actually ,its A thru Z set up . As a General Manager , I must be aware and prepared for all eventualities. And ,as opposed to throwing my subordinates under the bus, they learn also .
I have an extremely high percentage of customers that are , Prison Guards , LEO, Border Patrol ,and other of the alphabet agencies that frequent my establishment . Also , due to being a very high volume truck stop , I get the truck drivers input also ,they hail from all over the country .
If I ever give an alert that shits about to be ugly , You might want to consider it sir .
It would indeed be my last post , as I would have other opportunities to pursue .
Regards, GM
…and we like our doctor and will keep him and it will cost $2500 less/yr. any better ,we will have runaway prosperity.
At this point, you can probably assume all governmental numbers are lies, all governmental announcements are lies, and all governmental actions are based on lies. Does that about cover it?
Greetings,
Knowledge is power. Since the majority actually believe this crap, we just need to figure out a way to capitalize on it. Sorry to be so brash but I can’t change these numbers so I may as well try to benefit from it.