One thing that needs to be set straight though, there is no proof that the number wasn't manipulated, as claimed by Joe Weisenthal at Business Insider. He writes this headline: Goldman Drops A Bomb On People Who Think The Unemployment Rate Was Cooked
He then posts this over-the-top photo (of many bombs falling) to emphasize his absurd headline:
He then posts this comment from Goldman Sachs on the BLS number as it is proof that the BLS number was not manipulated:
The most eye-catching part of this report is the 0.3-point drop in the unemployment rate, to 7.8%. For the most part, this looks like a genuine move, as it comes alongside large increases in both the labor force (+418,000) and the tally of jobs in the survey of households (+873,000) of which 187,000 was due to government. (Note: The claim that the household employment gain was entirely due to government hiring is incorrect. We confirmed with the BLS that the seasonally-adjusted gain in government employment was 187,000.) In both cases, the labor force and the level of employment followed setbacks in both July and August, so it may be better to look at 3-month totals. On that basis, household employment is up 559,000 while the labor force is still down 100,000. One anomaly in the household data is that the U-6 measure of underemployment remained at the 14.7% level reported for August; this is due to a large increase in the number of workers working part time for economic reasons. For this reason, we have applied a 1-point downward adjustment to the MAP reading for unemployment.First, who the hell trusts bailed-out Goldman Sachs as the arbiter of truth?
Second, the GS note is simply repeating the BLS numbers and not addressing how BLS arrived at the numbers. This is a Goldman bombshell? The fact is that if the BLS was manipulating, they would do it deep in the numbers in a fashion that would be difficult for an outsider to detect. Manipulation would come most likely at the assumption level, where an equation is adjusted to better reflect, ahem, "reality." Nothing GS discusses has anything to do with this.
C'mon, Mr Wenzel, the household survey gain of +873k MUST be legit... It's election season so lots of temp campaign staff and... Halloween is coming up soon?
ReplyDeleteIts based on statistical sampling and a methodology/model for translating those results into a report. Of course the number is cooked in the sense that the methodology gives leeway for what it would define as legitimate adjustments and assumptions. I don't think anyone that is pulling this number together is trying to mislead or acting dishonestly, but I would also assume that the methodology allows for those at the top that are more impacted by political cycles to override or influence some of the model inputs. If your boss says, hey I think this factor should be x+3, chances are you're going to use x+3, lest you end up with a pissed off boss. That is how I think these models get manipulated.
ReplyDeletePretty much all the increase is due to an uptick in part-time workers.
ReplyDeleteLooks like the cost of benefits (esp healthcare) and uncertainty going fwd due to questions on the viability/future of ObamaCare continue to weigh on employment.
Thank goodness I have a job. Though...that could change if taxes rise a lot. It will soon become cheaper to stop spending on after-school care, not pay higher taxes and get by on one income.
Does a crony capitalist like Goldman Sachs bite the hand that feeds it? Of course not.
ReplyDeleteIf you search the Internet, there was considerable controversy involving the BLS very suspicious initial unemployment claims revisions several months ago. For instance, Dr. Anthony Sanders, a Finance Professor at George Mason University is quoted as saying about the BLS:
"The stock answer is that the methodology is flawed (surveys) and better data comes in after the fact. But 56 out of 57 weeks indicates that the BLS is playing games with the data. Fool me once shame on you, fool me twice shame on me, fool me 57 times shame of the BLS… The problem with BLS numbers are the same ones as the inflation numbers. The collecting and processing of the data is in the hands of those who gain or lose from the numbers. Massive moral hazard risk.” (See: "IS THE LABOR DEPARTMENT PLAYING POLITICS WITH JOB NUMBERS?" 4/19/2012)
1 Month before an election, a very important number prints in favor of an incumbent President by an Agency under his purview(when the number was expected to be worse, not better), this is not credible.
DeleteIf this article (use link to access)is accurate, and perhaps not unexpectedly, a couple of economists at BLS just happen to be financial contributors
to Obama and Democratic Conventions, meaning these are not uninterested parties. Even if they did not
directly work on this report, they interact with other BLS economists that do (wink-nod).
Agree with comments regarding GS, they are simply regurgitating BLS output they have no insights, other than rubber stamping from a supposed independent 'Authoritah.'
So what does this do, it raises more mistrust in the institution of government(and GS).
Link:
http://freebeacon.com/meet-the-obama-donors-at-the-bls/
Meet the Obama Donors at the BLS
This whole line of discussion tickles my funny-bone.
ReplyDeleteWho can seriously ask if the BLS manipulates data? This is like asking if teenagers masterbate. Please!
A better question would be, "Who are the players who will decide the election, and what do each of them want?"
We as libertarians tend to view things as individual actions - and they are at the base of things. However, we're talking about politics here! And politics means loosely defined constituencies!
Since I threw the first stone I'll also take the first stab. Here's my view of the groups that will have outsized effects on the election: (Voters are not listed because I don't think they will have a decisive role. I think votes will be counted so as to reinforce the views of the dominant constituencies.)
1) The Bankers (GS, JPM, BOA, CITI, etc):
I think these guys are split with a slight edge for Romney. President Obama's Election Delegation (hereafter referred to as PO'ED) have been pretty good tools. They admirably do as they are told, and try hard to sell it no matter how ridiculous it looks. On the other hand, they're pretty much incompetent at the selling due to their inability to understand the implications of what they're selling.
However, Candidate Romney And Party (hereafter referred to as CRAP) are insiders. They understand in detail how to sell things because they understand the implications, and therefore understand what lines of thought to avoid. But, as insiders their positions in government would make them decisive when the bankers are split on policy questions. And they could go rogue.
Who to support? Edge Romney - The bankers need the better banking salesman despite the risks.
2) Elite Society: PO'ED haven't been such good communicators as they'd anticipated. Resolution to issues important to the Brahmin class have been slow to materialize. When they have materialized, they've been under-promoted. CRAP, despite the party, is quite palatable to the Brahmins. The problem is that it is difficult to forecast which way he'll jump on any issue. This makes CRAP unreliable. No one knows whether a compromise is a necessary compromise or a secret dodge to the right.
3) The Federal Reserve: They're really PO'ED. CRAP wants to force out the University crowd - probably to replace the choicest positions with friends from the financial industry! The ingrates! CRAP will have no sluggish economy to complain about by November. Damn the Icebergs! FULL SPEED AHEAD!
4) The Federal Bureaucracy: They would love to be PO'ED again! Lots of goodies! Promotions for everyone! And the icing - the ability to kill anyone who says no! Meanwhile CRAP has to make nicey-nice with peon voters who would reduce funding and shorten the payroll. The country will get no CRAP from this crowd.
5) The State Bureaucracies: Are undecided. No one has yet offered them a bailout. They are worried about solvency, and a lynch mob if they can't find a rabbit in the hat soon.
6) The Media: Let's all get PO'ED again! Can you believe that CRAP objects to a 47% deadbeat rate? What a heartless thug!
7) The Unions: Waning influence.
8) Who else?
I was sitting in a restaurant waiting for my take-out when I saw some statist on the teevee saying it was "insane" to think the numbers were cooked and such.
DeleteHa! ... HAHAHAHA!
The whole frickin' system is wHAts insane.
- clark
The serial rapist godamn sachs says he isn't rapists...Film at 11:00
ReplyDelete