Well just as I suspected, right on cue, after the poor debate performance and before the elections in November, we get the largest leap in home survey jobs in nearly 30 years. The last time we had that many added in the household survey, the GDP growth rate was around 9%, and it’s currently 1.5%.
That’s why people who understand data and surveys look skeptically at the result of the household survey. It doesn’t mean a conspiracy is in place; it does strongly suggest that this month’s sample of 60,000 households threw an outlier (an observation that is numerically distant from the rest of the data) especially when compared with the establishment survey and other economic data. If so, it will likely correct itself in the next report. That’s not “trutherism” or denial, but straightforward data analysis. Just to remind everyone, the next report comes out before the election — the Friday before, actually. The employment rate drops to 7.8% …wow ! While the U6 which is a better indicator magically stayed the same at 14%. I’m sorry but I just don’t believe those figures. Even the Wall Street Journal warns that these numbers should be taken “with a grain of salt.”
So somehow in September, in addition to all the other discrepancies in the labor report, we have one more to add: that of the Schrodinger Student: one who is both in college and piling up student loans on one hand, yet on the other hand entering the work force in the month of September, a time when historically every single month in recorded history has seen an exit from the labor force for the 20-24 year old cohort.
See if you can spot the outlier (an observation that is numerically distant from the rest of the data) in this chart on employment of the 20-24 yr. old category below:
The official rate dropped from 8.1% unemployment in August. And the Bureau of Labor Statistics added 86,000 more jobs in July and August as more hard data became available.
The U.S. unemployment rate fell to 7.8 percent last month, dropping below 8 percent for the first time in nearly four years. The rate fell because more people found work, a trend that could impact the presidential election.
The Labor Department says employers added 114,000 jobs in September. The economy also created 86,000 more jobs in July and August than first estimated. Wages rose in September and more people started looking for work.
The revisions show employers added 146,000 jobs per month from July through September, up from 67,000 in the previous three months.
The unemployment rate fell from 8.1 percent in August, matching its level in January 2009 when President Obama took office.
The decline could help Obama, who is coming off a disappointing debate against Mitt Romney.
As usual with this number, the real unemployment data is hidden away inside the BLS report. We’ll update this blog as deeper analysis becomes available.
Update from Thomas Lifson:
Jack Welch is tweeting what many are thinking: that “these Chicago guys” are fudging the numbers. In the short run, there is probably no way to determine if there has been corruption of the BLS data.If this is a top-down effort to manage the data, then if next month’s data goes below the level when Obama took office, that would fuel a powerful media narrative that we’re back ont he way up. The old “stay the course” argument.
Bruce Johnson adds:
Ta da! Magically, after the poor debate performance, we get the largest leap in home survey jobs in nearly 30 years. The employment rate drops to 7.8%.
Now the “no President has ever won reelection with unemployment over 8%” rule is out the window. Additionally, this short circuits all the small business and jobs points made by Romney on Wednesday night.
What wonderful timing.
873,000 people found work, at home. Shazzam. Voila!
(Of the 873K surge in employment in the Household Survey 582K was in temp jobs and 187K was in government jobs..that’s all you need to know.)
Why does something of this magnitude not appear in the GDP calculations? GDP calculations are hard fact compilations. Home job surveys over the phone are what, exactly?
File this with the Nobel Peace Prize. Remarkable events surround Mr. Obama.
Colorado Tim: Yep… You know this is a lie. I own a business myself. I see the vacant businesses on the street of my shop. FedEx and UPS are driving around with emptier trucks. The economy is going off a cliff, and Obama’s people are playing with the numbers.
I sold my business off years ago (when he was elected) and got a govt. job. ; )
I’ve said it here before, but I’ll repeat it now in light of this latest release of questionable data: We have reached a sad point in our history when NOTHING released by our federal government can be taken at face value.
Question: How can unemployment go from 8.1 to 7.8 % magically by only adding 114K jobs.?
My guess: They changed the last three jobs reports to increase the job numbers forecasts and even more Americans have fallen off the unemployment line and stopped looking for work.
To get this kind of drop you would have to employ about 875,000 people in the past month. (Which by coincidence is the number the gov’t says found work in their home last month) I guess Obama team can’t stand losing graciously.
Here is the critical sentence in the report: “still many of the jobs added last month were PART TIME. The number of people with part time jobs who wanted full-time work rose 7.5% to 8.6 MILLION”
And it goes on and on and on…………..