The Latest Round of Bidementia Job Fictions

It is time for the monthly installment of the ongoing fiction work that is the Bidementia administration’s Bureau of Labor Statistics job reports.  (BLS Report)   A reminder that these reports are based on two surveys, which don’t have great response rates, one is a survey of companies about their job situation and the other is a survey of households regarding their employment status.  For reasons that are not clear to me at least, the company survey tends to get the headline attention.   The biggest red flag about these monthly reports should be the incredible divergence of these surveys, and the constant revisions of results, over the course of Bidementia.  Hard to believe, right, but it is almost like the results are being skewed for political purposes.  Ha, ha, ha.

So lets talk about the household survey first.  And as usual, multiple posts from Zero Hedge simplify understanding the report.  While the establishment survey says we added 272,000 jobs in May, the household survey says we lost 408,000.  And full-time employment went down by 625,000 while part-time went up by 286,000.  The difference between the two surveys has steadily grown, with the gap now being 9 million jobs!!  And a lot of this difference is explained by the infamous business birth/death model, which is just what it says–a model estimating how many jobs are created in new businesses versus those lost in businesses that shut down.  That model added 231,000 or almost 90% of the supposed new jobs in May and has added 56% or 1.9 million of all the new jobs since April of 2023.  This is so transparent and pathetic an attempt at manipulation of the data as to be laughable.

Other nuggets include that the revisions to prior months, while down, were lower than usual, with the company survey being lowered by 15,000 jobs for April and May.  Hourly wages grew more than expected, adding to inflation concerns.  The unemployment rate, calculated from the household survey, went up slightly, while the labor force participation rate declined slightly, as the number of slackers in the country continues to grow.  Why work when you can live off of government handouts or fraud?  The biggest job gains supposedly occurred in government and health care, which is heavily government-supported.  Real industries showed little change.  (ZH Post)   (ZH Post2)   (ZH Post3)

One caveat I will offer to the ZH focus on all “new” jobs over the last couple of years going to foreign-born workers.  This is not some conspiracy to bounce native-born Americans out of work.  Native-born employment has declined because those workers in general are older and retiring and because we have a huge number of native-born slackers who just don’t want to work and live off government aid, often obtained fraudulently.  The gap is filled by legal and illegal immigrants, increasingly those flooding in under Bidementia.  Illegal immigration is just plain wrong, but it has been economically beneficial, which I suspect is one reason why Bidementia allows, nay, encourages, it.  And one reason for the survey divergence may be that all these hard-working illegal immigrants can’t be reached or don’t respond.

So what does all this mean?  If the Federal Reserve believes the company survey, it would be less likely to cut interest rates.  If it believes the household survey, it would be more likely to cut.  The Fed has lots of data sources; hard to believe it relies on the BLS garbage, so be interesting to see what it believes is really happening in the economy and labor markets.  And sooner or later the fiction will be more fully exposed and we might get a glimpse of truth from the BLS.