Birth-Death model artificially inflates US jobs reports – same in the UK
In the UK, unemployment is not recorded accurately, it is a
system designed to inflate reality. See our report from last August –Unemployment double official government statistics
Paul Craig Roberts – Jobs Report Blues
On Friday the Bureau of Labor Statistics reported that there were 215,000 new jobs in March.
John Williams of ShadowStats.com reports that these “new jobs” result
from the the Birth-Death model that “artificially inflates headline
month-to-month payroll gains with add-factors that currently average
well in excess of 200,000 jobs per month.”
In other words, the jobs are the product of a model’s assumption that
unreported new start-ups created 200,000 more jobs than unreported
business failures lost.
To look at the jobs report in a different way, assume March did bring
215,000 new jobs and ask, “which sectors had jobs gains?” The answer is
the same as has been the case since I began years ago reporting on the
payroll jobs report:
Retail trade accounts for 47,700 of the jobs.
Health care and social assistance account for 44,000 of the jobs.
Waitresses and bartenders account for 24,800 of the jobs.
Manufacturing lost 29,000 jobs.
Part-time jobs without benefits comprise a rising percentage of US employment.
In the 21st century the main source of corporate profits has been
lower labor costs achieved by offshoring US jobs and by bringing in
lower-paid foreigners on work visas. This practice stopped the growth of
US real median family income. Federal Reserve policy kept consumer
demand alive by expanding consumer credit, which substituted a rise in
consumer indebtedness for the missing growth in consumer income. Today
the growth of consumer credit is limited by the absence of income growth
to service the debt.
In short, corporations maximized short-run profits by ruining their
domestic consumer market along with the personal income and sales tax
base for government. It is unclear that this extraordinary mistake can
be unwound.
