Job Growth faked-a result of DOL "birth/death model" pretend at home jobs?

[papau]

In a May 11, 2004 pg. 035 New York Post article called WHAT ARE THEY SMOKING AT THE LABOR DEPT.? by John Crudele says that last Friday the DOL disclosed that imaginary jobs had been increased by 117,000 to 270,000 for the latest month - and that without those extra 117,000 make-believe jobs, the total growth for April would have been just 171,000 - sub-par for an economy that's supposed to be growing at more than 4 percent a year, but right on target if you buy those of us who say the economy is not growing at 4%, and who expected 170,000 new jobs. So who knows anything about the Labor Department's "birth/death model" that is on the DOL site and that is used to justify these numbers?

http://www.nypost.com/business/23936.htm

WHAT ARE THEY SMOKING AT THE LABOR DEPT.? By JOHN CRUDELE

May 11, 2004 -- DON'T get too excited about all those new jobs that were supposed to have been created in April. I'm not going to waste a lot of my precious space on this, but the bottom line is that most of the 288,000 jobs that the Labor Department says were created last month may not really exist. They could be figments of statisticians' optimism. <snip>

Back in the March employment report, the government added 153,000 positions to its revised total of 337,000 new jobs because it thought (but couldn't prove) loads of new companies were being created in this economy. That estimate comes from the Labor Department's "birth/death model." You can look up these numbers on the Department's Web site. <snip>

Last Friday, it was disclosed that these imaginary jobs had been increased by 117,000 to 270,000 for the latest month - because, I guess, the stat jockeys got a vision from the gods of spring. <snip>

Also keep in mind that the government doesn't distinguish between good companies being created and, say, a guy doing consulting work out of his basement because he can't find real work. <snip>

A source in the intelligence community tells me that the U.N. oil embargo of Saddam Hussein was worthless because Iraqi oil was being shipped all these years to a Caribbean island called St. Eustatius, unloaded into onshore tanks and then reloaded into U.S.-bound tanker ships. The same switcheroo is being done with Iranian oil, I'm told. <snip> [e-mail]

[bluestateguy]

1. "That's just propaganda from a liberal rag"

oops!

[unblock]

2. lol! for those fortunate enough to be unfamiliar with the nypost,

it features shrill and sensational headlines in very large font size, and invariably includes at least one "article" (i.e., NOT on the op-ed page) which is a fact-free rant against kerry, bill clinton, hillary clinton, or unspecified liberals.

then you should see what's on the op-ed page.

:puke:

[fearnobush]

3. I Think everyone needs to

email this to Lou Dobbs:

[tritsofme]

4. How does this account for the 1.1 million non-seasonally adjusted jobs

added in April?

[papau]

5. There is "created" and then there is "created" - LOL - but sigh....

The "adjustment starts with a pretend job creation in the "1.1 million non-seasonally adjusted jobs"

[tritsofme]

6. Also, IIRC the birth/death model subtracted

315,000 jobs in January.

[tritsofme]

7. It was actually 321,000...

subtracted from January using this model.

It seems like selective outrage when we don't like the numbers being presented.

I believe the current benchmark for the birth/death model has been in place for over a year now.

[papau]

8. Thanks but a few questions ... :-)

but we did not have job growth until the birth death model changes

wonder if there is a connection? What validation other than "it sounds reasonable" was done before the change in the birth death model last year?

:-)

We also get new seasonal adjustments more often than I recall in the past - are we testing our seasonal adjustments to a truth - or to a goal? - and over a years time do the adjustments add to a zero adjustment net? If not, what is the flow of "seasonal adjustments" into total jobs created to date?

[tritsofme]

9. Seasonal adjustments have been pretty accurate,

there is only a 27,000 job discrepancy between non-seasonally adjust and seasonally adjusted total non-farm payrolls.

Contrary to popular belief, they just don't pull numbers out of their ass.

[papau]

10. Thanks for the Seasonal Adj is OK post - we're left with at home jobs as

the fudge factor on both series.

I know that the estimator procedure/program has been changed in the past year or so - has anyone run a verification of the new birth/death model?

Has anyone run an old versus new birth/death model just to see the numeric change in total jobs caused by the change a year ago to the new system?