Endless BS from the BLS

Fri, Dec 7, 2012 - 10:57am

Not that numbers like today's should surprise anyone around here but, for perspective, we should probably take a few minutes to discuss the methodology.

First of all, the NFP numbers are always going to be part of the government MOPE and the pro-government shills in the media are always going to provide the necessary SPIN. That said, any discussion needs to begin with the report methodology itself. Namely, how can the BLS be expected to provide an accurate picture of November employment when we are only barely beginning the month of December? The answer is: They can't. The only way that an employment report can be cranked out so quickly is through the use of statistics and, frankly, guesswork.

And here's the rub...the "headline number", the stated unemployment rate, is simply a fraction. The BLS takes total labor pool and subtracts out the number of people that it thinks are actually working. From there, you divide the labor pool by the total number of unemployed and you get the "unemployment rate". It looks like this:

(Amount of People Unemployed) = Stated Unemployment Rate

(Total Available Labor Force)

If, for example, you have a 1,000 people in your labor force but 100 are unemployed, you have an unemployment rate of 10%. If 10 of the unemployed find work, next month you'd have 1,000 people in the labor force and 90 that are unemployed. This leaves you with an unemployment rate of 9%. See how that works?

The problem is in the methodology. The U.S. Bureau of Labor Statistics is using an antiquated system. They assume (wrongly) that, after 12 months of being unemployed, the people in question have either given up looking for a job or found some other way to survive. For the purpose of the labor report, these folks simply cease to exist and they disappear from the data. Because of this misassumption, the amount of people counted as unemployed and the total labor force have been shrinking. For November alone, the BLS shrunk both the numerator and the denominator of our fraction by 540,000. Stated differently, in November, 540,000 became unemployed for more than a year and, therefore, are no longer counted. They're just gone. Poof! Now, did some of the 540,000 find a job? Certainly, likely more than a few, but most are still alive aren't they? Aren't most still searching and scraping, diligently trying to make a living and provide for their families? Of course they are! But the BLS doesn't think so. The BLS just ignores them.

Let's get back to our fraction. In the data listed above, we showed a 10% unemployment rate by having 100 people out of 1000 not working. But, next month, we simply remove 10 people. They've been out of work so long that they must have just given up. Maybe they retired. Took disability. Left the country. Who knows and who cares? This doesn't matter to the BLS and their media shills. For this new month, we have 90 (100-10) people now unemployed and a total labor force of 990 (1000-10). What is our new unemployment rate? 90/990 = 9.1% WOW! Isn't that great?!? Our economy must be growing because our unemployment rate fell from 10% to 9.1% in just one month! Cue the band! Happy days are here again!!

Uhhh....not so fast. I think you all can see that this is nothing but statistical manipulation and nonsense. It's meaningless and deliberately misleading. Before you get too upset, realize that they've been doing this for years in their efforts to create a picture of a healthy and vibrant U.S. economy. The technical term for what I've described is the "Labor Force Participation Rate" and the chart below shows how this rate has been declining since 2001 and is now back to 1980 levels. Yikes! Don't look for this to get much better anytime soon but do expect continued scheming and distortion from the BLS in an effort to paint as rosy of a picture as possible.

Additionally, the BLS tells us that the numerator of our fraction actually grew this month by 146,000 jobs. Again, this is primarily a statistic-based guess and it seemingly ignores the other lousy economic data we've been seeing as well as the continued stream of corporate layoffs and the economic impact of Hurricane Sandy. The BLS told us this morning that the U.S. added 53,000 jobs in retail (for Xmas shopping), 23,000 in "Administrative and Waste Services" (that sounds pleasant) and another 23,000 in "Hospitality and Leisure". Sounds like a vibrant and growing economy to me! NOT!!

In the end, the data was gamed in the metals pits as an excuse to stop out some weak-handed longs but then, cooler heads prevailed and the metals have rallied. I have lasts of $1703 and $33.12 as I type, UP a little on the day. All is well and I expect/hope for a solid close. Then, we head into next week and the FOMC with their announcement of their plans for a world without $45B/month in Operation Twist. The metals should rally into the news next week and, then, continue on balance to rally for the remainder of the month. Apparently I have some company in this view. Read this: https://www.zerohedge.com/news/2012-12-07/gold-‘storm’-could-rise-sharply-next-week-fed-say-ubs-and-nomura

And that's all for now. Even though I fear that some of you think I'm creating the Jim Willie Podcast Network, demand is so great for more Jackassery that the two of us are recording another podcast in an hour or so. I'll post it later today so please be sure to check back this afternoon or over the weekend. Additionally, today's CoT should be really interesting, particularly in silver, because of the enormity of the moves during the reporting week. I'll be adding my initial reactions to the comments of this thread so look for that later on, too.

Have a great day and BTFD. Regardless of what anyone says, it ain't pretty and it ain't getting any better anytime soon.


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turd [at] tfmetalsreport [dot] com ()
Does Feb19 Comex gold close above $1250 on Friday?
Total votes: 192


zeroexperience · Dec 7, 2012 - 10:58am



Roark · Dec 7, 2012 - 10:58am


Furst. Neener-neener-neener! :)

SilverHawk · Dec 7, 2012 - 10:59am



paulindoon · Dec 7, 2012 - 10:59am

Wanted to get the"coveted"

Wanted to get the"coveted" first. Now I can read TF

Darn, missed again!!!!!~

philly · Dec 7, 2012 - 11:02am

Thurd...right after picking up

Thurd...right after picking up 10 more ASEs from one of Turd's advertisers (Provident). I suggest everyone follow my lead and help a Turd out!!

Edward G · Dec 7, 2012 - 11:02am

Turd and Willie

Always an entertaining listen

Nana · Dec 7, 2012 - 11:05am

The Ongoing Control Of The Metals

and everything else will not stop until the PTB says so or the American people finely put a stop to it themselves......

Door #1


Door #2

Anonymous · Dec 7, 2012 - 11:10am

Removed comment

Removed comment.

Anonymous · Dec 7, 2012 - 11:11am

Removed comment

Removed comment.

· Dec 7, 2012 - 11:15am

It ain't gonna be door #2.  

It ain't gonna be door #2. Silver is nothing but necklaces and Thanksgiving dinnerware to most. Probably be door #3. The system starts breaking down and we all get vindicated the 11th hour when everyone else is screaming "what the hell is going on. I thought we were recovering" 

Edward G · Dec 7, 2012 - 11:16am



Be Prepared · Dec 7, 2012 - 11:19am
Motley Fool · Dec 7, 2012 - 11:19am

BS from the BLS

It's simply getting ridiculous. I can't believe anyone takes it at face value.

babaganoush2307 · Dec 7, 2012 - 11:20am

@ Be Prepared

I think that is a logical solution to our problem

TJeffson · Dec 7, 2012 - 11:21am

Fron Denninger's post about NFP today

"The working-age population went from 243,983 to 244,174 (thousands), an increase of 191,000 working-age people. But the total number of employed people fell from 144,039 (thosuands) to 143,549, a loss of 490,000 actual employed people!

The spread is even worse, of course -- closer to 3/4 of a million workers, because you must account for the population increase as well." 

So much for that actual unemployment number. Let the lies continue... I'm stacking no matter what. 

opticsguy · Dec 7, 2012 - 11:22am

CNN explained it for us

Obama needed a good jobs number to claim that the economy is "healthy enough" for the Bush tax cuts to expire. It's to counter the Repubs claim that the economy is too weak to raise taxes.

Nana · Dec 7, 2012 - 11:27am


Yep, right you are, the PTB will not stop or give it up and the people will do nothing about it to stop it either.

Looks like Door #3 .......

babaganoush2307 · Dec 7, 2012 - 11:28am


...they just took the last of the Norfed Liberty Dollars off of ebay. And canceled all my bids on the ones I did find crying luckily I messaged all the sellers while the listings were still up, told them that they are going to get taken off of ebay because you can't sell them anymore and to hit me up privately with a message when they do so that I can buy them. And what do ya know devil fuck you government, this is why gun and drug control DOES NOT work. If people want something they are gonna get it! You say I can't have liberty dollars, well I say I can!

........('(...´...´.... ¯~/'...')
..........''...\.......... _.·´
thecoloredsky · Dec 7, 2012 - 11:29am

Something strange is

Something strange is happening at work. More people are openly discussing about purchasing guns and even gold/silver to a lesser extent. Are mindsets changing? I feel like I'm ahead of the curve with the help of this community and zerohedge.

Be Prepared · Dec 7, 2012 - 11:30am

The Real Methodology of the BLS...

.... for deciding the Unemployment Rate....

Bollocks · Dec 7, 2012 - 11:35am

@Mantis @rl999 @11IMIX @Edward G @Dryocopus pileatus

Thanks for the thumbs up!

I don't post any old bollocks (no, wait...) up here.
I think it's all relevant and am glad you do too -and anyone else that appreciates hearing what's going on in the UK.

To anyone else, I whip out the gorilla...

indosil · Dec 7, 2012 - 11:36am

@ Turd

So does today's data means more bullshit & noise till the"Fiscal Cliff" drama is over??

An excuse for Obummer to let the Bush Tax cuts to expire??

Silver_investor · Dec 7, 2012 - 11:36am

The Propaganda Continues

I had thought that today's unemployment report would be more reflective of reality, what with the election behind us. I mean, with all the layoffs that have been announced since the election, the unemployment rates goes down? Sure. Okay. It seems that TPTB have other reasons, besides getting Obama re-elected, to make the economy appear to be in better shape than it is. And there are likely to be many more layoffs in the coming months due to the costs companies face with having to comply with Obamacare. I'm amazed at how long TPTB have been able to keep this house of cards from completely imploding. And I reckon they'll continue to astonish me for a little while longer. But I know that I'm right about the end result and the steps I've been taking to prepare for the death of the U.S. Dollar.

OC15 · Dec 7, 2012 - 11:37am

It's like I said last month

Apparently if you kick everyone off of unemployment then the unemployment rate goes to zero. Problem solved.

Silver_investor · Dec 7, 2012 - 11:38am

@Be Prepared

That's a good solution!

AlexCojones · Dec 7, 2012 - 11:41am

What percentage read ZH?

I read both TF and ZH daily--even attend church here some Sundays. What percentage read The Tylers? 20% 30? More? Also, what is MOPE? Usually I'm good at figuring out acronyms but this one has me stumped.

Also Baba G, good graphic. It's so very graphic and apropos.

القراع عصفور · Dec 7, 2012 - 11:42am

something strange

i've heard it referred to as the "ascension".

Road_Scholar · Dec 7, 2012 - 11:45am

Good News- BLS #s!!

I don't know how the BLS does it but they got it right again. It DOES look like lots of people got jobs this month. The Top 3 of the new jobs I've seen created in Southern California with my own eyes...

3) "Retail"- Oranges, flowers and peanut sales on freeway off-ramps have seen a rise in the last few months. Sales of "found" items through pawn shops also seem to be up.

2) "Administrative and Waste Services"- The number of random people spinning signs or waving flags for all kinds of services like check cashing, foreclosure services and Cash for Gold places is up.

1) "Hospitality and Leisure"- There has been a rise in people just hanging out. I see more people leisurely milling around at parks, on streets and road medians. They have nice cardboard signs spreading hospitable messages and asking for donations.

القراع عصفور · Dec 7, 2012 - 11:46am


management of perceptions economics

Bollocks - de nada :-)

Nana · Dec 7, 2012 - 11:46am

RE: Something Strange

As the layers are pealed back more and more are seeing the deception and are starting to get it however to many are still asleep........ 

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