The official jobs narrative the mainstream media, politicians, and government alike tout is as believable as Bitcoin going to zero. Before the invention of the Internet, propagandized information was easily believable by the sheeple. CBS, NBC, CNN, and Fox News could control the narrative, and “conspiracy theorists” who challenged what we were told were laughed at. Even today, sheeple are herded by the perennial (CNN) cattle dog, as many do not understand that six companies own 90% of the media. Anonymous leaks, independent consultants, and everyday people can voice their opinion through several avenues that were not available before.
Economics is a field and profession built on theory and models that only work in a perfect environment. Our government reports these numbers as fact, and at the same time routinely adjust the methodology in which these numbers are reported. Have you gone to the store lately and paid attention to the size of the items you buy? Have you noticed the package size is smaller, but the price is at least the same, if not higher? Is this a circumstance of 4.3% unemployment for 2% inflation? I will argue that inflation is much higher than 10%. Compare several items today with a few years ago. Why would you hold any confidence in a currency or banking regime that sells us a recovery myth when our president was elected on the opposite?
If you analyze the Bureau of Labor Statistics jobs numbers, the trend is quite interesting. According to Morningside Hill, since 2008, 93% of the total 6.7 million jobs created have existed in data models based on the birth/death adjustment. The birth/death rate model was created under the Reagan administration because Reagan believed that the agency was undercounting the number of jobs created. The BLS includes this adjustment as perception that they were undercounting jobs created through new start-up business formations (that were too young and too small to show up in the Establishment Survey). In the Establishment Survey, it is apparent that full-time positions are being replaced with part-time jobs. A form is sent to roughly 146,000 businesses each month for information regarding the number of employees that were at the business during the month. When this survey is filled out, the business just counts the employees they have on the payroll. The erroneous numbers come from part-time employee counts. Part-time employees count as 1 job, so if the individual has three part-time jobs, then it seems like three jobs were created. Additionally, surveying only 146,000 businesses leaves the 90% confidence level at +/- 120,000 jobs.
Jobless claims are at 43-year lows, which shows that everything in the labor market is improving. This is not the case, since more people have been moving towards the contingent workforce, which leaves them economically disadvantaged. The Government Accountability Office says the contingent workforce was 32.4% in 2006, compared to 37.1% in 2010. This new trend of the gig economy shows that jobless claims are not a realistic assessment of the job market. Just because you have three jobs doesn’t mean you make as much or your life is any better. The International Monetary Fund recently released a report that the U.S. is now a third-world country. If anyone has cared to look, this has been the case for many years, as the academics who live in statistical models cannot see what is really happening. Look for cryptocurrencies and the precious metals to continue to move higher.
Cheers,
Colin