The Unemployment Numbers are Wrong
The government is due to release the latest employment numbers today. According to Chuck at Rebel Traders, the model used to calculate the numbers is flawed:
What have I been saying ever since the recession began, the Bureau of Labor Statistics use of the “birth/death” model is flawed. To adjust the monthly jobs data by a number which is computed from a ‘model’ of how many businesses were created and how many closed up during any given month is simply asking for trouble in maintaining any sense of accuracy.
Bloomberg.com has put together a page of remarkable graphics that show how flawed the model is:
When the Government releases Friday’s employment report, nearly a million jobs could be erased. The change won’t show up in the monthly report. Rather, the expected drop will show up in the government’s revised job losses from April 2008 to March 2009, showing the labor market was in much worse shape than we knew at the time.
The numbers really are worse than we think they are. Worse than we’re being told they are.
Tags: unemployment
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