Will the Real Jobs Number Please Stand UP

With the Dow falling back below 10,000, the financial media has trotted out a plethora of market bulls this morning. From Joe Lavorgna to Mike Darda to Lawrence Meyer to Bob Barbera, we have endured an inordinate amount of rosiness regarding the Non-farm Payroll report for January.

Even though the economy shed another 20,000 jobs last month and the benchmark revisions brought the total of jobs lost since December of 2007 to a staggering 8.4 million, we have been told by the above individuals to only concentrate on the household survey, which showed the unemployment rate dropping to 9.7%.

Perhaps an explanation for the reconciliation of the differences between the establishment survey and the household survey can be found on the Bureau of Labor Statistics web site.

Changes to The Employment Situation Text, Tables, and Data

Several changes to The Employment Situation news release text and tables are being introduced with this release. In addition, establishment survey data have been revised as a result of the annual benchmarking process and the updating of sea sonal adjustment factors. Also, household survey data for January 2010 reflect updated population estimates. See the notes at the end of the text for more information about all of these changes.

It very well could be that a reduction in the labor force in the household survey from their updated population estimates brought the unemployment rate down. The civilian labor force dropped by 249,000 according to the survey.

But either way, the question remains; what impetus can be realized that will cause 8.4 million people to become employed once again? These people were employed primarily in the real estate sector and the ancillary jobs associated with housing. Will they be hired back anytime soon? Can they be expected to become part of the goods producing sector of the economy? I think, sadly not.

It looks like we will have to wait for the next credit bubble to form in order to hire people to build and service the next asset bubble.But with sovereign debt issues pervading around the globe, it doesn't look like robust world GDP will abound.

What we should be doing instead is cutting taxes, government spending and regulations in order to create viable and balanced job growth. But instead we are headed in the exact same, wrong direction yet again.

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You are one of the few Not many of those names you mentioned actually say HOW or WHERE jobs are going to be created, they just look at their graphs and say "hey, look, the second derivative is improving, just like 1983/1992/etc". In addition to the points you bring up, I would add that a lot of the temporary workers hired in the last year were in the non-value-added mortgage sector, either originating, underwriting, or processing refinances spurred on by Bernanke's Hunt Brothers-style cornering of the agency MBS market, or hired to clean up the mess created in the bubble. Once those non-value added jobs are gone, where will those folks work? The Administration better hope someone develops a new bubble, soon. Maybe we can convince Norwegian municipalities to buy pet rocks from us, or something. Submitted by stryker (not verified) on Fri, 2010/02/05 - 8:47pm » reply |

Michael, A thought Michael, It appears that the US government is spending money to prop up business whose models are antiquated or unfair, take your pick. In my opinion propping up these dinosaurs is at the expense of the next great thing, whatever that may be. That is shameful because not only will we be paying for this for generations but we could quite possibly not see the advancements that defined the last century. The decisions that are being made are so bad they have to be on purpose. We as civilians are forced to change when times change and labor markets change. We are no longer learning to be punch card operators, but the government seems to want to keep using the figurative punch cards when there has to be a better way. Are we suffering from sunk funds syndrome where we place more importance on money already committed over money that will be spent in the future? I also wondered if you buy into the idea that the Federal Reserve is not very Federal and is completely controlled by big banking? I understand that this is not a new idea, but I wondered if you had any insight. I happen to believe that the Fed is quite possibly the biggest dupe job ever pulled on America. It seems that the issue of Central Banking is so old that we have forgotten what we are fighting about. Submitted by Rusty (not verified) on Mon, 2010/02/08 - 8:23am » reply |

The Fed was instituted to The Fed was instituted to protect banks. That's old news. They provide money for banks to lend and that increases their profits. They also allow government more control of the economy by manipulating interest rates and money supply. Submitted by Michael Pento on Mon, 2010/02/08 - 2:09pm » reply |

Comment on the Fed Michael, I am not sure I completely agree with this specific comment about the Fed. I dont think the Fed was created to protect banks. I think it was created under the guise to protect banks but really it was for the big banks to consolidate their power and monopolize the currency. The smaller banks dont seem to be offered much protection by the Fed. It seems that after each crisis there are less and less smaller banks. Throughout the Fed's history they have continued to consolidate power especially after the S&L crisis. The Fed is quite possibly the great trojan horse of the modern era. Who is "They" that provides the money. Im not sure that the government hasnt given up control of the economy. Is it possible that those who are in office are allowed to exist in their position by the banks? Im not sure that Blankfein is not actually the de facto President. Dimon for Vice? Or do I have that backwards? Submitted by Rusty (not verified) on Mon, 2010/02/08 - 2:52pm » reply |