Payroll Numbers: Using the Truth to Lie

By: Alex Wallenwein | Sat, Apr 10, 2004
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There is probably not a single gold-buff who doesn't look at the March 2004 non-farm payroll numbers with the greatest amount of suspicion.

What exactly has changed from February, when the Bureau of Labor Statistics reported only 21,000 new jobs added? How did we get from there to 308,000 inside of one month? Did anyone read any news that would explain such an increase?

Yet, as always, it is too easy to just jump up and scream: "Lies. Lies! Nothing but Liieeesss!!!!" What is needed is evidence. Is there any evidence that the government - or the media - lied?

Well, there are some grounds for suspicion:

  1. That "308,000" number is just too pretty, just too darn close to what the President said he and his administration would "create" for this year: an average of 300,000 new jobs added each month for the rest of the year. (After last month's dismal report, and the November elections rapidly approaching, so much honesty just can't be tolerated, I guess.)

  2. Strange also, in that connection, that last months figures were "revised upward" by more than one hundred percent! From 21,000 to 47,000, to be exact. A four or five percent margin of error may be tolerable, on the outside. But an over one hundred percent margin of error??? Gimme a break! What kind of light does that throw on the reliability (and, shall we call a spade a spade?) on the credibility of the current figures?

Normally, direct evidence of outright government lying is hard to come by - at least not right away. The truth always has to work itself through the worm holes of the human psyche before it gets a chance to shine again.

But this time, it's different.

On the Bureau of Labor Statistics' own web site, in their own Employment Situation Summary, they show a perfect example how the government/media conglomerate lies by using the truth. It's an age-old game, and it's called "partial truth."

Here are the true facts as actually reported by the BLS (assuming that those actually are the facts - but we'll give them the benefit of the doubt, this time). Following, you will see the truth - all of it. Not just the part that looks good. It's a strange thing that nobody cared to actually look and see if the media reports were true.

The truth is that:

  1. Yes, non-farm payrolls increased by 308,000 - but the total economy actually lost 3,000 jobs during March.

  2. Unemployment in total numbers actually rose by 182,000 during the period. (Don't ask me how that jibes with the 3,000 jobs lost. Please contact BLS for the answer.)

  3. Unemployment as a percentage of the working population remained at 5.7 %.

  4. 14,000 more people dropped out of the labor force altogether in that time.

  5. The largest increases were seen in the service sector, goods-producing, and construction. Manufacturing stayed flat: a perfect zero.

  6. The number of workers who had to accept part-time instead of full-time employment rose to 4.7 million (were are not told by how much it rose).

How can such a whale of a positive news blast as the media's report on the non-farm payrolls increase was, coexist side by side with an open admission by BLS that the total number of unemployed persons in the economy remained almost exactly the same (5.7% in February, 5.7% in March)?

How about the realization that the number of existing manufacturing jobs also hasn't changed att all from that of February? Yet that is the one sector Americans are the most concerned about. Did any news story report on that? I haven't seen any. Have you?

Now, what kind of a picture does that show? A bit more sobering, is it not?

I know that fuzzy math has been institutionalized during the last twenty years or so, but, please help me out, here: If the total number of unemployed has not decreased at all despite 308,000 workers being "added" last month, where are the jobs that were "subtracted"?

The only possibility is the farm sector, but isn't this spring time? Isn't this the time when farm workers are usually hired instead of laid off? Are we outsourcing our food production as well, now?

No explanation was given at all for this screaming discrepancy. On the non-farm payroll side, everything either increased or remained stable. There were no job losses reported that could account for this. How likely is it that agricultural payrolls fell exactly by the same amount in which the non-farm payrolls increased during March so that total employment figures remained "stale"?

Now, to all of this sheer wonderment, let's add some controversy. The following is an excerpt from FxStreet's Commentary of Sunday, April 5, 2004:

The data was followed by a bit of controversy as markets, particularly electronic trading of the U.S. Dollar Index Futures, became overly active just minutes before the release. The suspicious price action left many participants to speculate that the numbers had been leaked prior to the official release. A report on Yahoo from Reuters containing the jobs figures with a time stamp of 8:28 has been the center of focus. Reuters and Yahoo insist the data was released at 8:30 with an erroneous time stamp. Nevertheless, an investigation has been announced by the Labor Department.

Interesting? That's nothing. It gets better.

Please refer back to our most recent article, "Stand Back! The Economy is Reflating!!". What did Mr. Fed governor Poole say on March 30. 2004? Was he not heard mumbling something about an "upside surprise" when he was asked when (long) rates would start going up again?

Well, surprise, surprise!

Was he actually preparing the way for exactly such a "surprise" with his remark? Did he already know this "surprise" was coming? Or is he preparing his flock for slowly receiving the truth about inflation, i.e., that it is coming back - with a vengeance?

We don't know. All we can do is watch the inflation news every day and observe. Interestingly, Mr. Poole has come out again on April 6, 2004, only a week after reassuring everyone that inflations was not a problem - except this time, he said the Fed must act "aggressively" to combat inflation at the earliest possible sign.

It definitely looks like he, on behalf of the Fed, is preparing the masses for a rate-increase sometime this year. The official line was until recently that rate increases will not happen until the economy is on a stronger footing. But it doesn't look like the economy as a whole is really adding a whole lotta jobs. Yet, a rate increase is apparently deemed necessary to keep the dollar from falling through the floor.

So, did our rulers need some uplifting news to pretty-up the employment picture a little by wowing people with this tremendous jobs growth half-truth, so that any coming rate increase would be more digestible to the common man?

Judging from the recent past, the selling of economic illusions appears to have become a standard policy tool by those who would lead us. The entire "new-economy" valuation bubble of the late nineties is probably the strongest example of this policy focus. So is the post-911, not-so subliminal message that: "Spending is good. Saving is bad. Getting into debt - to consume more - to save the economy - is patriotic!" Or how about this one: (it's been around for quite a bit longer): "Gold is bad. Paper-money is good"?

Whether this was a wise policy move is indeed questionable. A lack of market follow-through after Monday, April 6, 2004 is being passed off as a reaction to bad news on the war against terrorism/Iraq front, but it quite possibly reflects a realization by many investors that these employment figures aren't quite what they were pumped up to be.

One thing is for sure: the Fed wasn't betting on price-inflation coming back to bite them in the rear this fast. Until recently, they were quite content with keeping interest rates low to jazz up apparent economic performance a bit more so that we could actually start adding some jobs before the rates will have to be raised. Now, jobs figures still aren't dancing the jive yet, but prices are spiraling higher and higher, mocking the Fed's directorate for central planning.

To all of these economic-designer woes, we must now add one additional major headache for our fearless rulers: the hand that reaches into our pockets every year to sustain their gargantuan federal bureaucracy is about to get slapped away.

Countless numbers - literally millions - of people are about to discover for themselves that their leaders have, for eight decades, financed their voracious appetites for power by illegally enforcing an otherwise legally imposed tax.

Very soon (if people in this country have any sense of moral outrage left in them), without their coveted ability to help themselves to our money, our leaders will need to seriously re-think how they are going to run this country. (On top of that, Americans will have to seriously re-think how they will allow their leaders to run their country in the future.

As almost everyone who frequents gold web sites knows, it is far easier to keep politicians and bankers honest if you give them less money to play with. It should be equally clear that a return to honest money will keep them even more honest.

Once weakened in their power by not being able to reach into your pockets anymore, and once Americans recognize where their leaders ill-informed policies have led them economically, a call to a return to gold as money may not appear so utterly hopeless any longer.

Exciting times are coming for gold.

I hope you got some.


 

Author: Alex Wallenwein

Alex Wallenwein
Editor, Publisher
The Euro vs Dollar Monitor

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