Pinocchio statistics out of Washington

I’m finding it hard to accept that people believe official US government news releases any longer.  What with the IRS ‘losing’ vital e-mail records, and the contemptuous disregard for immigration law and regulations, and the active neglect of veterans by the health care system designed to assist them . . . the examples of official duplicity and deceit are legion.

Economic statistics are no better.  Right now things are very bad indeed in our economy, and looking to get a lot worse in the not very distant future;  but you’d never know it from the optimistic figures being bandied about by official sources.  Let’s look at a few, starting with the May 2014 unemployment numbers.  Phoenix Capital Research points out:

Upon closer inspection, the report was a total disaster. You wouldn’t know this from the financial media’s coverage, but it was.

The establishment survey shows a gain of 288,000 jobs last month. However, the household survey shows that that the economy lost 73,000 jobs in April.

This is critical. The household survey does not allow for “duplication of individuals,” meaning that if someone holds more than one job, they’re only counted once. In contrast, if someone is working multiple low paying jobs, every single job will be counted in the establishment survey.

Put it this way. If you go from one solid full time job to working as a waiter, cab driver, and tossing pizzas, the establishment survey will show that the economy created TWO jobs (one job lost plus three started= two jobs net) whereas the household survey will show NO growth (one person lost a job and started working elsewhere).

With this in mind, you should be paying attention to the household survey. The household survey shows 73,000 jobs were LOST. This negates the claim that 288,000 were created.

Aside from this oddity, we find that 806,000 people left the labor force. Moreover, reentrants (folks returning to the labor force after being unemployed) fell 417,000. And new entrants (folks entering the labor force for the first time) fell 126,000.

So the number of people in the labor force fell as did the number of people returning to the labor force and the number of folks entering the labor force for the first time.

And yet somehow the jobs picture is supposedly rosy?

. . .

Be aware, there are warning signs flashing throughout the financial system . . .

There’s more at the link.

The June 2014 unemployment report wasn’t any better.  Paul Craig Roberts notes:

Washington can’t stop lying. Don’t be convinced by last Thursday’s job report that it is your fault if you don’t have a job. Those 288,000 jobs and 6.1% unemployment rate are more fiction than reality.

. . .

Since 1994 there has been no official measure than includes discouraged people who have not looked for a job for more than a year. Including all discouraged workers produces an unemployment rate that currently stands at 23.1%, almost four times the rate that the financial press reports.

What you can take away from this is the opposite of what the presstitute media would have you believe. The measured rate of unemployment can decline simply because large numbers of the unemployed become discouraged workers, cease looking for work, and cease to be counted in the U.3 and U.6 measures of the unemployment rate.

The decline in the employment-population ratio from 63% prior to the 2008 downturn to 59% today reflects the growth in discouraged workers. Indeed, the ratio has not recovered its previous level during the alleged recovery, an indication that the recovery is an illusion created by the understated measure of inflation that is used to deflate nominal GDP growth.

. . .

… in June 523,000 full-time jobs disappeared and 800,000 part time jobs appeared.

Here, perhaps, we have yet another downside of the misnamed Obama “Affordable Care Act.” Employers are terminating full-time employment and replacing the jobs with part-time employment in order to come in under the 50-person full time employment that makes employers responsible for fringe benefits such as health care.

Americans are already experiencing difficulties making ends meet, despite the alleged “recovery.” If yet another half million Americans have been forced onto part-time pay with consequent loss of health care and other benefits, consumer demand is further compressed, with the consequence, unless hidden by statistical trickery, of a 2nd quarter negative GDP and thus officially the reappearance of recession.

Again, more at the link.

Finally, Zero Hedge asks ‘Do You REALLY Think The Official Inflation Numbers Are Even CLOSE To Accurate?‘

Let’s be clear here… inflation does NOT mean prices have to move higher in nominal terms. The reason for this is because companies cannot and will not simply raise prices overnight. Consumers will not simply put up with the cost of a good going up time and again.

So don’t look for the cost of an item to necessarily go straight up in nominal terms. This can happen, but more often than not, corporations engage in a number of different strategies to maintain profit margins without raising prices.

These strategies include:

1. Shrinking the box/package of the good, thereby selling less for the same amount.
2. Not filling the package all the way; again selling less for the same amount.
3. Changing what’s considered a “serving size” or the quantity of good being sold.
4. Swapping in lower quality ingredients, thereby selling a lower quality good for the same amount.

Companies have been doing all of these since 2008. Most recently however, costs have risen to the point that these strategies won’t cut it anymore. Consequently, we’re starting to see prices going up across the board.

More at the link.  Needless to say, ‘official’ inflation statistics reflect none of those factors.  That’s why ‘real’ inflation (as calculated by John Williams of Shadowstats, who does take them into account) is running at about 3x the official rate.

Those are just three examples.  I could cite many more . . . but what’s the point?  When Washington ignores facts and reality, and persists in telling us blandly that everything’s fine, it’s time to duck and cover.  The explosion can’t be far away.

Peter