BLS Employment Data Is Too Bad to Be True
Market Play Ground ^ | Feb. 4, 2011 | By Steven Hansen
As a devout skeptic of Bureau of Labor Statistics (BLS) methodology, the January 2011 jobs report filled my wildest expectations for nonsense. In a series of moves over the last two months, the BLS has dropped the unemployment rate from 9.8% to 9.0%, while adding only 157,000 jobs.
The unemployment rate fell by 0.4 percentage point to 9.0 percent in January, while nonfarm payroll employment changed little (+36,000), the U.S. Bureau of Labor Statistics reported today. Employment rose in manufacturing and in retail trade but was down in construction and in transportation and warehousing. Employment in most other major industries changed little over the month.
unemployment rate
What happened? Here are the words of BLS.
Changes to The Employment Situation news release tables are being introduced with this release. In addition, establishment survey data have been revised as a result of the annual benchmarking process and the updating of seasonal adjustment factors. Also, household survey data for January 2011 reflect updated population estimates.
Why the big drop in unemployment? It is caused by the mathematical consequence of decreasing the civilian workforce by almost 800,000 over the last two months while decreasing the unemployed count by almost 1,200,000.
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