FICTION AT ITS FINEST
by Rob Kirby
KirbyAnalytics.com
January 4, 2008

Today, the Bureau of Labor Statistics [BLS] released their report on December Non Farm Payrolls:

THE EMPLOYMENT SITUATION: DECEMBER 2007

The unemployment rate rose to 5.0 percent in December, while nonfarm payroll employment was essentially unchanged (+18,000), the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Job growth in several service-providing industries, including professional and technical services, health care, and food services, was largely offset by job losses in construction and manufacturing.

Average hourly earnings rose by 7 cents, or 0.4 percent.

One of the methods the BLS uses to ‘hedonically adjust’ employment data is the vaunted Birth/Death Model:

Now let us take a look at the same set of numbers for 2007, shall we;

I’d like everyone to take note of how the BLS’s Birth / Death Model for “Financial Activities” has EXACTLY the same inputs [all positive] for the last 3 months of 2006 versus 2007.

Can anyone tell me what the likelihood of such an occurrence really is given the empirical realities of a plethora of already announced layoffs in the mortgage-related, asset backed paper and more widely in the structured financed units of financial institutions?

Well, regarding the odds of these 3 numbers [highlighted in red, above] being identical two years on the trot – I just asked Mr. Jim Willie Ph. D. [statistics] what he thought those real odds were: he told me, “one in pie to the 15th power, or, one in about 28 million.

Does ANYONE really believe that the Financial Services sector of the economy really added jobs during December, 2007?

In case I missed it, is Citibank hiring?

This hedonically adjusted jobs report is a disgrace, even to anyone with an IQ of grapefruit and clearly illustrates an intentional desire to deceive the investment community.

How much longer will this be tolerated?

© 2008 Rob Kirby
Editorial Archive

CONTACT INFORMATION
Rob Kirby
Kirby Analytics
Toronto, Ontario, Canada
Email

The opinions of FSU contributors do not necessarily reflect those of Financial Sense.