Nah, The Bureau of Labor Statistics Wouldn't Fudge Unemployment Numbers Right Before a Presidential Election, Would They?

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by Bill Sardi

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It's a fact, you're not going to get re-elected if unemployment rates are high. So just fudge the numbers and re-correct them at a later date (Jan. 2013) which the Bureau of Labor Statistics (BLS) typically does on a regular basis.

The latest new jobs numbers, this time for September '12, reflects what America is becoming — a country that is fooling itself with phony numbers that go unchallenged by the nation's news press. For example, 2.2% is the target rate of inflation published by the nation's central bank — The Federal Reserve. But the actual rate of inflation is more like 9.3% (ShadowStats.com).

With President Obama reeling backwards from the fresh thrashing in the first televised Presidential debate of the campaign, the Bureau of Labor Statistics stepped up to the plate and released a made-to-order report that says the unemployment rate dropped unexpectedly from 8.1 to 7.8%.

David Leonhart and Mark Lander, writing at a New York Times blog, said without questioning: "Jobs Report Brings Unexpected Good News for Obama." CNN also punted and republished the government numbers without question, saying "Unemployment rate tumbles" in their headline story.  The Washington Post also sang the same wrong song.

PBS, which depends upon federal government funding, said: "A rare banner day on the jobs front, at least at first glance. The official unemployment rate dropped below 8 percent to 7.8…"

Call the nay-sayers "conspiracy theorists"

Former General Electric CEO Jack Welch, former General Electric CEO, took the brunt of the left-wing critics for questioning the BLS new jobs numbers. After the BLS announced that the unemployment rate fell in September to 7.8 percent, the lowest level since January 2009, Welch tweeted: “Unbelievable jobs numbers… these Chicago guys will do anything… can’t debate so change numbers.”

Dan Eggen writing for the Washington Post said: "Welch is getting a lot of attention for an unfounded accusation that the Obama administration somehow cooked the positive jobs numbers issued Friday by the Bureau of Labor Statistics." Eggen then went on to point a finger at the last President who attempted to fudge employment numbers — a Republican (Richard M. Nixon). Talk about partisan political reporting.

No phony numbers here

The Christian Science Monitor reported that Labor Secretary Hilda L. Solis "appeared on CNBC to refute allegations that any massaging of the data had occurred." She said: "You know I am insulted when I hear that because we have a very professional civil service organization where you have top economists working” at the Bureau of Labor Statistics (BLS), she said. "It is really ludicrous to hear that kind of statement."

Steve Haugen, an economist at the Bureau of Labor Statistics, "flatly dismissed the idea that there was any way the White House or Obama campaign could have had a hand in how the numbers turned out," said a CBS News report. "The data are not manipulated for political reasons. I’ve been involved in the process myself for almost three decades. There’s never been any political manipulation of the data, period,” Haugen told CBSNews.com.

Of course, the liberal Huffington Post went all out in its defense of the Obama Administration jobs numbers in its headline report entitled: "Here’s Why The Jobs Report Conspiracy Theory Is Baseless."

The HuffPost report said:

"Some conservatives have accused the Bureau of Labor Statistics of cooking the September jobs report numbers to help Obama. But given how the government collects and reports the monthly data, those claims are probably baseless.

But it just isn’t so. The monthly jobs numbers are put together by career government analysts, using long-established statistical methods that are shielded from political influence. Until recently, the BLS was run by an appointee from the Bush administration, and it currently has no political appointees.

"…..The short story is that the job truthers’ claims are baseless. No conspiracy here."

What is the target number for new jobs?

In January of 2012 the U.S. Chamber of Commerce reported that 20 million new jobs will be needed over next decade. That amounts to 166,666 per month, assuming more job losses don't raise that figure.

Marc Chandler, writing at BusinessInsider.com says: "The US needs to create around 170-200k net new jobs a month to drive the unemployment rate toward 7%.

Ezra Klein, citing the Hamilton Project (Brookings Institute), wrote in January 2012 at the Washington Post, said adding 200,000 jobs per month it would take till 2024 for the labor market to recover.

Doublespeak

The news media as well as the President himself are guilty of doublespeak here.

Nate Silver, writing a headline report entitled "Obama's Magic Number? 150,000 Jobs Per Month" at a New York Times blog in Feb of 2012, said: "Here's a spoiler: reports that say more than 150,000 jobs have been created can generally be interpreted as good news for Mr. Obama. Reports that come in at under 150,000 jobs could put him on a trajectory toward defeat."

Republican Senator John Thune said: "today’s job figures are well below the 250,000 to 500,000 jobs per month that Vice President Biden forecast (in April of 2010)."

Here is a video clip of President Obama taking credit for 290,000 new jobs in April of 2010 (go to 0:46 minute point). He went on to say in that taped speech that: "While (those numbers are) welcome, we have a lot of work to do." The September u201812 gain in new jobs was miserable 114,000. How do you take credit for 290,000 new jobs and then think 114,000 new jobs over two years later will buoy you to re-election?

Peter Morici, writing at TheStreet.com, says: "In the weakest recovery since the Great Depression, nearly the entire reduction in unemployment from its 10% peak in October 2009 has been accomplished through a significant drop in the percentage of adults participating in the labor force – either working or looking for work. Were the adult participation the same today, the unemployment rate would be 9.8%. The most effective jobs program appears to be to convince working-aged adults they don’t need a job."

Matthew Yglesias, writing at Slate.com, says the "BLS reports today that the economy added 114,000 new jobs (with, I remind you, a +/- 100,000 confidence interval) in September." What was that margin of error again?

Authoritative explanation of how the jobs numbers were contrived

Economist John Williams of ShadowStats.com in his most recent October 5, 2012 commentary #473 surmises how the BLS produced "deliberately-inconsistent numbers" regarding new jobs.

Williams has consistently reported the Federal Government fudges numbers that measure the economy and jobs. While the BLS says the unemployment number is 7.8% for Sept. '12, ShadowStats says it is really 22.8%. I'll let Mr. John Williams do the rest of the talking here:

"The August-to-September change in the headline unemployment rate almost certainly was not a 0.3% decline.  The Bureau of Labor Statistics (BLS) knows the reported change in unemployment was wrong — other than by extreme coincidence — and it knows what consistent reporting actually showed.  Only politics prevents the BLS from releasing the correct number, whether the unemployment rate actually declined, held even, or rose as predicted by consensus forecasters.  The lack of transparency here in the data preparation allows for direct political manipulation.

The problem is that the BLS knowingly has been preparing the seasonally-adjusted headline unemployment numbers on an inconsistent and non-comparable basis for some time.  The September number was prepared using a different set of seasonal factors than was used in coming up with the August number.  The reporting difference can be large, when proper consistent month-to-month changes are used.

The BLS has the correct number and could publish it…. Now would be a particularly good time for the BLS to come clean on its unemployment estimates, even if the numbers "confuse" data users." 

Williams goes on to say:

"As has been discussed frequently, reporting of month-to-month changes in both payroll employment and the unemployment rate is of such poor quality that the headline labor data have become worthless as indicators of current economic activity.  Problems with seasonal-factor distortions — created by the economic collapse and exacerbated by the use of concurrent seasonal factors — have widened the likely margins of reporting error in the payroll survey to something beyond the usual +/- 129,000 jobs at the 95% confidence level (see Hyperinflation 2012), and the monthly headline unemployment numbers simply no longer are comparable on a month-to-month basis.

Bill Sardi [send him mail] is a frequent writer on health and political topics. His health writings can be found at www.naturalhealthlibrarian.com. His latest book is Downsizing Your Body.

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