One month before the presidential election, there was suddenly a major reversal in unemployment trends that have taken place during the entire administration of the Obama presidency. The figures indicate explosive growth is taking place in the U.S. economy and this has occurred overnight. The explanation of where this growth is coming from or how it has happened is illusive.
Unlike the previous four years, large numbers of jobs were supposedly created last month. Actually that's not exactly the case. The household survey reported 873,000 jobs were created, whereas the business survey reported 114,000 - a typical amount. In previous months, the household survey has actually indicated major job losses. The mainstream media has failed to report this. However, when a number suddenly appears that lacks credibility in the same survey, but that number is positive, it apparently is worth reporting.
Where did these jobs come from? It's not clear from the report. It was specifically stated that "manufacturing employment edged down in September". There was a loss of 16,000 jobs, so there is no evidence that U.S. manufacturing is on the upswing. Based on the following statement, 600,000 people were hired part-time last month: "The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) rose from 8.0 million in August to 8.6 million in September". This is a huge change. Where are these part-time workers employed and what were they hired to do? Will they be fired the day after the election?
Perhaps even more amazing is that the BLS reported that the U.S. labor force grew in September 2012 for the first time in years. From August 2007 to August 2012, the U.S. labor force shrank like it would during a depression with a total 9,602,000 people leaving it. It abruptly increased by 418,000 last month. What caused such a large number of people to suddenly influx into the labor force? GDP last quarter barely grew indicating a stagnant U.S. economy.
The number of unemployed persons, at 12.1 million, supposedly decreased by 456,000 in September. The BLS stated that the unemployment rate fell to 7.8% - the first time it has been below 8.0% since just after President Obama took office. The continual multi-year unemployment rate of over 8.0% has been a major issue in the presidential election.
The numbers in the September employment report are quite fantastic and there is no basis for believing them. Disreputable statisticians can easily produce highly unreliable numbers. If statistics are inconsistent with the past, with each other, have no traceable explanation or seem contradictory with real world observations, they are suspicious. In the case of the September employment report all four criteria have been met. The quality of U.S. economic numbers have been decaying for the last 30 years. They seem to currently be making the transition from manipulation to outright fantasy.
Daryl Montgomery is Author: "Inflation Investing - A Guide for the 2010s"
Organizer, New York Investing meetup http://investing.meetup.com/21
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