Last month, when reporting on August unemployment, I made the following prediction:
Next month (the last report before the election), the labor force will shrink further, enought to bring the unemployment rate down to 7.9% – the level it was at when Obama took office.
This morning, the BLS (Bureau of Labor Statistics) reported that the unemployment rate fell not to just 7.9% but to 7.8%. I should have expected it. It wouldn’t be good enough for unemployment to end up at the same level, just before the election, as when Obama took office. If it did, Romney could make hay of the fact that unemployment didn’t improve during Obama’s term. But now Romney can’t say that.
And I should have expected that the BLS would have to come up with some other gimmick to make unemployment drop, since the media wised up last month and roundly mocked the claim that so many people had dropped out of the labor force. So, instead, this month the BLS claims that the employment level (the number of people working, according to the household survey) rose by 873,000 – the biggest leap in over 29 years and the fourth largest increase since record-keeping began in 1948. (The largest occurred in April, 1960, when it rose by 1,286,000. In June of 1983 it rose by 991,000 and in June, 1948, it rose by 889,000.
Come on! Given the state of the economy and given that the establishment survey reported a sub-par job increase of 114,000 (only 104,000 in the private sector, both figures corroborated by the ADP employment report from yesterday) – less than needed to keep pace with growth in the labor force, does anyone believe that the employment level grew by 873,000? Here’s the BLS report: http://www.bls.gov/news.release/empsit.nr0.htm. I’d like to also provide you the raw data that goes into that calculation of unemployment (the spreadsheet that I’ve been providing each month), but there seems to be problems with WordPress this morning that prevents me from uploading the spreadsheet. It’ll be back next month.
This month’s report crosses the line. It’s just too unbelievable and the timing of such an unbelievable report is way too fishy. Seriously, I think that there needs to be a congressional investigation into the workings of the BLS and whether or not the White House is pressuring the BLS into releasing bogus or doctored data. The data upon which economic decisions are based has to be reliable and trustworthy. Does anyone trust this data after this month’s report?