The Labor Department's Consistently Inaccurate Jobs Report

By
Real Estate Broker/Owner

The Labor Department released its consistently inaccurate jobs report on Friday showing that an additional 539,000 Americans lost their job during the month of April.

The reason I bring up the "consistently inaccurate" statement is not out of personal opinion but rather past performance.  For the past six months, the Labor Department has woefully underestimated the monthly number of job losses only to retrace the data and increase the number of job losses once the data is out of the limelight.

Here is what the Labor Department has initially published for monthly job losses when compared to their revised findings.

           Initial / Revised

Oct 2008:  240K / 380K

Nov 2008:  533K / 597K

Dec 2008:  524K / 681K

Jan 2009:  598K / 741K

Feb 2009:  651K / 681K

Mar 2009:  663K / 699K

On average, over the past six months, the Labor Department has underestimated the actual monthly job losses by over 15%.  That's not a small adjustment.

I'm not saying that they are intentionally trying to blunt their report, but I'm just saying.  That is a wild deviation.  And the fact that over the past six months that they have always erred to the positive makes one pause for a moment.

What this consistently inaccurate reporting means for the April jobs number is that job losses were likely higher than the 539,000 that were reported.  Not that Wall St. will care, they are too busy celebrating a fictional housing and economic bottom.

 

 

Comments (4)

John Walters
Frank Rubi Real Estate - Slidell, LA
Licensed in Louisiana

Quite a difference when you look at the revised number.  It's the government they are allowed to be wrong over and over and still too many people trust them to take care of them.

May 09, 2009 08:14 AM
Terry Haugen STAGE it RIGHT! 321-956-2495
Stage it Right! - Melbourne, FL

Mark, not only that, currently unemployed people who have either not yet filed, dropped off the rolls, or have taken parttime work are not included in the unemployment numbers.  Right now their stats say 8.9% but if you add all those people in, its more like 16%.

May 10, 2009 06:40 AM
Mark MacKenzie
Phoenix, AZ

John:  Based on the events of the past several months including the TARP, the PPIP, the banks stress tests, and these interesting looking revisions, it is very clear that the government is more worried about the banking system and economy than they are letting on.

Terry:  Right, the U-6 unemployment number stands at 15.8%.  I was expecting this number to increase more than it did.  I'm not sure why it didn't only that maybe the government will revise it higher at a later date like they do the job loss numbers. :)

May 10, 2009 06:54 AM
John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

I've been watching these numbers Mark, and it's only reasonable to assume the govt. is playing with the figures, since they consistently under report.  What should be surprising is Wall Street's reaction; they accept the bogus numbers and "away they go." However, a deeper look at the reaction from Wall Street seems to indicate complicity in the myth. 

May 10, 2009 03:13 PM