In 1954, Darrell Huff wrote his classic book How to Lie with Statistics, which covered many popular ways people use and abuse statistics to make them say anything they want. Well, it appears that our good friends at the Bureau of Labor Statistics (BLS) are no stranger to these techniques. Last Friday they released their new jobs number that said the employment rate had fallen to 8.3% on a net addition 243,000 new jobs.
While everyone in the mainstream media and the White House were busy celebrating the recovery of the American economy, Zerohedge dug into the numbers over the following days to reveal a much different picture of what was really happening.
The big problem they noticed was: how do you reconcile a reduction in the unemployment number with the fact that the labor force participation rate has been dropping for the last 12 years and is now at the lowest point in 30 years?
As it turns out, this is one of the primary tools by which the BLS manipulates its employment numbers. One of the easiest ways to get the unemploment figure to drop is to simply stop counting some of the unemployed as folks who are still looking for a job. And that’s exactly what the BLS did, to the tune of almost 1.2 million people last month.
More abuses of statistics lay in the BLS’s definition of employment. For example, if 100 engineers get laid off and then found jobs working part time at McDonalds, would you consider that a full recovery of the employment situation? Of course not. But the BLS does. The most shocking part of the jobs report was that of all the new jobs the BLS claims were created, only 10% were full time positions.
Certainly not the picture of economic health that we have been led to believe.
Votaire once told the aristocracy not to worry. He urged them to lie until they got the power they wanted and then afterward, when they held that power, they could do whatever they wanted.
As my old accounting professor used to say: Figures Don’t Lie —– but Liars can figure.