Don’t look now but the Federal Government is about to admit to gigantic mistake. Apparently, they don’t count so well.
Due to its “birth/death” model the Bureau of Labor Statistics (BLS) has undercounted the number of unemployed by over 800,000 jobs in the last 12 months.
You see, somehow throughout the last 12 months of one of the greatest recessions on record, the BLS model showed more jobs were created by imagined new businesses than were lost by those that went under.
All of which would only make sense in the twisted world of a government statistician.
Luckily for the markets, this is a story that has been known for sometime now.
So while this news may shock a few on Main Street in the morning, Wall Street will probably yawn.
Here’s the story from CNNMoney entitled: Poof: Another 800,000 jobs disappear
“As bad as the government’s jobs readings numbers have been during the Great Recession, we’ll soon find out the real situation likely was worse.
Job losses during the recession may have been underestimated by close to a million jobs. So instead of employers cutting just over 7 million jobs from their payrolls since the economic downturn began in December 2007, it’s expected that the Labor Department’s new estimate will be a loss of 8 million jobs.
“It’s an enormous understatement of the severity of the crisis,” said Heidi Shierholz, labor economist with the Economic Policy Institute, a union-supported think tank. “It confirms that things were actually worse on the ground than what the reports suggested.”
The new reading will come when the economists at the department’s Bureau of Labor Statistics release their annual revision of U.S. payrolls from April 2008 through March of 2009 Friday, using data that wasn’t available as the monthly readings were being estimated and reported.
Typically the revision results in only a slight change in the previous estimate — about 0.1% to 0.2% of the total number of jobs. But there was nothing typical about the twelve month stretch that ended last March.
But the department has already given a preliminary look at this Friday’s revision, and it says it believes it will show 824,000 fewer workers on payrolls than the current estimates.
That would be the biggest downward revision in the 30 years for which comparisons of those adjustments is possible.”
It is a comedy I tell you…lies, damn lies, and statistics.
The cleat of reality is out there folks—just don’t expect to get it from the government. It is not in their interest.
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