BLS Has One Letter Too Manyby Richard Daughty
The big news, of course, is that the Bureau of Labor Statistics at the Department of Labor reported that non-farm payroll employment continued to fall in April, and 539,000 jobs were lost, which probably explains why they later note that “Overall, private-sector employment fell by 611,000” and that “the unemployment rate rose from 8.5 to 8.9 percent.” Nevertheless, since December 2007 (when the recession began), they figure that 5.7 million jobs have been lost, and “since September 2008, manufacturing has lost 1.2 million jobs,” which is Very, Very Bad (VVB), because manufacturing is how economies work; you make something that somebody wants at a price that gives you a profit. The really ugly news is that all of these job losses were are all private-sector jobs, since government hiring still goes up and up, every month, helping to make things worse and worse. Later on we get the surprising news that “The civilian labor force participation rate rose in April to 65.8 percent, and the employment-population ratio was unchanged at 59.9 percent.” I don’t know what “civilian labor force participation rate” means, actually, but judging from my own experience and watching other people at work over the years, we are a lazy bunch of whiners, and we seem to participate in actually working about two-thirds of the time, so this 65.8% thing looks about right to me! Hahaha! But it was the “employment-population ratio” being unchanged that got me, as it seems that, mathematically, the only way that it can stay unchanged when employment is falling is if the population went down! I was also surprised to see that the BLS reported that “Average weekly earnings, total private” is $614.53, whereas the average workweek is 33.2 hours. Now, I look at this and I scratch my head in puzzlement, and after grabbing a calculator and beating it into submission by repeatedly punching in $614.53 a week times 52 weeks to find the “average” annual income, I see that the average income is $31,955.56 a year. And yet when you look at the salaries of those who get paid through taxation or self-imposed fees on customers and/or taxpayers, they make at least twice that! And sometimes it is whole multiples of that, as it is not uncommon for some agency or college or city manager butthead to pull down a quarter million bucks a year! Sometimes more! Hahaha! My disrespect for “public servants” who make more than their employers (the taxpayers) while doing an obviously poor job aside, in the category of “professional and business services,” that industry lost 122,000 jobs in April. The report notes that “Half of the April decline occurred in temporary help services,” which is a particularly bad omen. To make sure that you understand that inflation in healthcare will continue at its staggering pace, the report also notes, “Health care employment grew by 17,000 in April. Job gains in health care have averaged 17,000 per month thus far in 2009, down from an average of 30,000 per month during 2008.” Of course, employment in federal government jobs “rose by 66,000 over the month largely due to the hiring of temporary workers for Census 2010 preparatory work,” which means that these people will be on the payroll in 2009, 2010, and probably 2011 as they fan out to identify where everybody lives and force them to answer a lot of embarrassing questions, like, “Would you describe your house as a ‘pigsty’ or an ‘eye-sore?’” and the wife and kids are yelling out over your shoulder, “It’s a hell-hole! An ugly hellhole!” The Really, Really Bad News (RRBN) is when you look at the U-6 estimate of unemployment, which includes “Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian population plus all marginally attached workers,” and which was 15.8%!
There were also some big downward revisions for prior months, and the laughable Birth/Death Model assumed, for no particular reason that anybody can actually discern, that another 226,000 “hypothetical jobs” were created in April, including 76,000 jobs in leisure & hospitality, 65,000 on professional & business and 38,000 in construction! Hahaha! Things are looking bad for everything except gold, silver and oil, which is good because they are all cheap as hell right now! Whee! This investing stuff is easy! May 20, 2009 Richard Daughty (Mogambo Guru) is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the writer/publisher of the Mogambo Guru economic newsletter, an avocational exercise to better heap disrespect on those who desperately deserve it. The Mogambo Guru is quoted frequently in Barron’s, The Daily Reckoning, and other fine publications. Copyright © 2009 Daily Reckoning
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