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May 2, 2008

Today's Jobs Report

-- by Dave Johnson

We had a GOOD jobs report today from the ever-trustable Bush administration. Employers cut fewer jobs in April, jobless rate falls,

Employers cut far fewer jobs in April than in recent months and the unemployment rate dropped to 5 percent, a better-than-expected showing that nonetheless reveals strains in the nation's labor market.
All I'll say is that the Labor Department uses a model that said 45,000 jobs were GAINED in construction. As homebuilding nosedives and with commercial construction starting its own nosedive, the Labor Department's model says that 45,000 jobs were GAINED in the economy. We all know that construction jobs were lost, not gained. So we simply do not know what is happening with employment and certainly cannot believe this report.

Remember, since the 2001 recession they say we have had remarkably low unemployment. But we also know that most of the lost jobs never returned, and most new jobs pay much less. Most of the people I know who were laid off in the dot-bomb crash never found similar jobs, and are all making a lot less -- some never found ANY job. (Some work as bloggers, making $60 a month.)

So read this, about the screwy statistics: April Jobs - Another Report From Bizarro World,

Once again the BLS should be embarrassed to report this data. Its model suggests that there was 45,000 jobs coming from new construction businesses, 72,000 jobs coming from professional services, and a whopping 267,000 jobs in total coming from net new business creation.

. . . Repeating what I said last month, virtually no one can possibly believe this data. The data is so bad, I doubt those at the BLS even believe it. But that is what their model says so that is what they report. Just as there is mark to model in the investment world, there is mark to model in the BLS world.

. . . With housing falling like a rock and commercial real estate now following suit, the BLS is assuming that 45,000 new jobs were added in construction. With lenders blowing up and countless self employed real estate professional exiting the business the BLS is assuming 8,000 new jobs were added in financial activities and 72,000 jobs from professional and business services. The total number of jobs added in April by such absurd assumptions was 267,000 jobs.

Posted by Dave Johnson at May 2, 2008 10:11 AM

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