The Reported ‘Good News’ Was Bad News — John Williams

This is from John Williams’ ( introduction to his detailed report on the shortcomings of the June jobs and employment report.

“The Good News in the Reporting of June Labor Conditions Was Not Good News. Headline June employment and unemployment numbers were more typical of deteriorating, broad economic activity than they were of an expanding economy in its purported sixth year of recovery.

“Conditions deteriorated sharply in June. Headline payroll jobs rose by 223,000 per the Bureau of Labor Statistics (BLS), but underlying reality likely was an outright monthly loss of at least 50,000 (-50,000) jobs in the headline aggregate. The headline gain came in close to consensus expectations, only because of a downside revision of 60,000 jobs to May payrolls. Net of that revision, June payrolls rose by 163,000. Yet, that gain was exaggerated further by undisclosed, upside shifting in seasonal factors for May and June payrolls, due in turn to unreported inconsistencies in historical data generated by BLS concurrent seasonal-factor adjustments. Allowing further for false, monthly add factors in the Birth-Death Model, in excess of 200,000 jobs, June 2015 payrolls most likely fell month-to-month.

“Not-seasonally-adjusted headline, annual growth in payroll employment continued to slow for the fourth consecutive month.

“Separately, aside from the headline June payroll gain of 223,000, which was a count of jobs, not people holding jobs, headline full-time employment fell by 349,000 (-349,000), representing the count of people who lost full-time jobs in June.

“On the unemployment front, the drop in the headline U.3 rate from 5.5% to 5.3% could not have been more negative. Instead of the 375,000 drop in unemployment representing people finding gainful employment, it represented those people leaving the headline labor force, most likely being shifted to the headline discouraged-worker category by the BLS. In contrast, the headline ShadowStats Alternate Unemployment Rate, including an estimate of all discouraged workers, held at 23.1% in June.”

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