[EMMAS] WHAT ARE THEY SMOKING AT THE LABOR DEPT.? -- Most of
barbara gaines
jobs" created could be figments of statistical imaginationSent:
Wednesday, May 12, 2004 9:27 AM Subject: WHAT ARE THEY SMOKING AT
THE LABOR DEPT.?
Most of the "newjobs" created could be figments of statistical
imagination
I think no one will accuse the New York Post of having a Democratic
bias here and John Crudele has a great track record in deconstructing
the misleading statistics emanating from the federal government as
they apply to our economy.
I wonder, why doesn't Kerry talk about this?
Curtis
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.
Anyone who plodded through my column last Thursday knows I predicted
that job growth in April would be better than the 160,000 to 170,000
jobs that the "pros" were anticipating.
But I also said, quite emphatically I hope, that the stronger growth
would be an illusion - the result of the Labor Department's computers
making happy predictions about seasonal job creation that could
neither be verified nor justified.
I'll explain one aspect.
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.
As staggering as the assumption about new companies was in March,
the Labor Department got even more brazen in April.
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.
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
the pros' targets.
Take away all 270,000 make-believe jobs and, well, you have the
sort of pessimism that the political pollsters are seeing.
If I was the suspicious type (and if I thought Washington was smart
enough), I'd suspect a nasty motive behind the sudden surge in these
mystery jobs. But for now, let's just acknowledge their existence.
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.
What does this new job announcement mean in the real world?
It means there will be more pressure on the financial markets, as
we've seen for a while but especially since last Thursday.
It also means that the Federal Reserve now has the excuse it needs
to raise interest rates in June (as I've said before would happen)
and will probably start regretting that move by the end of the
summer.
And President Bush will probably give in to temptation and start
crowing about the economy, going against the mood, as captured by
pollsters.
This will make him look as out of touch with reality as his father
did.
* Press reports say they are thinking of removing a 9/11 plaque
from the New York Stock Exchange because it's unduly flattering to
former Chairman Dick Grasso, but I hear they are also replacing all
the round, shiny doorknobs in the building.
It seems they remind too many people of the top of Grasso's head.
(If you have an "I hate Dick" story, please send it to me.)
*
Here's some more bad news about Iraq.
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.
Oh, and the source says Washington would rather nobody know about
this.
* Please send e-mail to:
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