More Fake Unemployment Numbers?
What do you get when you cross President Trump who is all about the optics and the ability for the government to estimate economic data? You get favorable numbers. We could be in the midst of the great depression and the government would still be reporting strong employment numbers and telling us how strong employment is right now.
As a review, the government reports employment numbers at the beginning of each month. Those numbers have two components. First, the labor department reports how many jobs were gained or lost in the economy for the prior month. Second, they add or subtract the number of jobs they “estimate” were created or lost. This is referred to as the birth/death ratio. It is how many jobs that were born or died that the department of labor’s normal way of calculating missed.
I have always had a problem with that number because probably like you I don’t trust politicians. When it is all said and done, those estimates are going to paint a positive picture. Yes, there are months were that birth death ratio was negative and jobs were subtracted from the main numbers. To be fair all Presidents have had access to this estimate. So this is not a President Trump thing. President Obama pumped up his numbers as well.
As of last month, we were at 641 estimated jobs created versus 594 reported jobs. You can do the math. Without the estimates, we would have negative job growth. Today’s number was the creation of 222,000 jobs with 102 being estimates. That brings the total number of jobs with a net of 73 jobs since President Trump took office.
So what kind of shape is the real economy in job wise? What is the stock market betting on? I don’t that things are as good as reported and here is why. President Obama was the only President in history to not have a 12 month period where economic growth exceeded 3%. His last year in office the economy was wavering on a high wire. Things turn around immediately when President Trump gets elected? Companies start hiring on the promise of tax breaks and reform? Finally, we recover from 8 years of failed policy like that? Turning job creation around is a lot like turning the Titanic around. It doesn’t happen over night.
President Trump promised job growth and lots of it. He is a master of controlling the optics. The problem is the stock market is betting on something that probably is not there.
note: these numbers are based on original numbers and not “revised” numbers.