Saturday, October 13, 2012

Sept 2012 Jobs Report: Even More Doubtful

A few days ago, in my Blog entitled The Unexpected Drop in Headline Unemployment, along with other people, I commented how the headline employment drop from 8.1% to 7.8% was very strange given everything we know about the economy this year.  Most economic commentators were in fact expecting the September unemployment rate to tick-up to 8.2% not drop to 7.8%! 

Now I wish that I had titled that blog, "The Unbelievable Drop in Headline Unemployment!" This because, thanks to the excellent TrimTabs website, the data behind the September 2012 unemployment headline number is even more unbelievable and extremely suspicious. Let me show you why.

The unemployment rate is the calculated by the dividing the number of unemployed by the sum of the employed PLUS the unemployed all converted to a percentage. So for the unemployment rate to drop, the number of unemployed must drop and/or the total number of employed (full and part-time) must rise--either will reduce the unemployment rate.  All this year, the unemployment rate has been drifting down because people are leaving the workforce and therefore are no longer counted as unemployed.

Figure 1 shows that the non-seasonally adjusted number of unemployed (the raw data) dropped by almost 1 million which is about double of any other September number since 1948!    

Figure 2 shows the number of employed for every September from 1948.   You can see from the data all the way back to 1948, that September is not a good month for employment except this month---when employment surges----right near a pivotal election!!  You'd have to be a fool not to see this as suspicious.

Figure 3 shows that part-time workers suddenly and unexpected surged this September for the second time in about 50 years!
Figure 1 Number of Unemployed:   Shows that the non-seasonally adjust number of unemployed (the raw data) dropped by almost 1 million which is about double of any other September number since 1948!

Figure 2 Number of Employed:  The number of employed surges at the highest September rate in 60 years making the unemployment figure go down.
Figure 3 Number of Part-time Workers (considered employed)  The number of part-time workers suddenly and unexpected surged this September for the second time in about 50 years!  Since part-time workers add to full-time workers, an increase in worker reduces the unemployment rate.
All in all, the BLS, has given what amounts to be the surprise of a half-century!   Is it data manipulation in time to re-elect the incumbent?   All this record improvement when everyone knows the economy is still sick and slow-growing!

It looks extremely fishy to me.  How does it look to you?

No comments: