December 2006 US employment data: An information of mass deception, hiding a strong decrease of US employment


Decoded news / January 8, 2006 -
"When the wise man points to the moon, the fool sees the finger" (Lao Tse)



December 2006 US employment data: An information of mass deception, hiding a strong decrease of US employment
Major financial medias and operators have made their headlines last Friday with the "unexpected strong US non farm employment data for December 2006" (+167,000). Based upon this 'factual data', the same players immediately swept the markets with the key 'conclusion' they have been desperately clinging to for months now: the US economy is indeed showing resilience and the 'soft landing scenario' is definitely taking place. Fair enough? Or is it another example of Lao Tse's proverb?
For the research team of LEAP/E2020, it definitely is another of Lao Tse's situation. And therefore we will try to clearly identify what is the moon and what is the finger in that situation.

Let's have a look at the reliability of the data provided by the US Department of Labor by carefully analysing the 'Reliability of the estimates' chapter of the 'Employment Situation Technical Note'.
There one may learn that because the confidence interval for the monthly change in total employment from the household survey is on the order of plus or minus 430,000, it means that there is a 90% chance that December 2006 figures range from - 263000 to + 597,000. And the technical note explains that "These figures do not mean that the sample results are off by these magnitudes, but rather that there is about a 90-percent chance that the "true" over-the-month change lies within this interval. Since this range includes values of less than zero, we could not say with confidence that employment had, in fact, increased."
For the LEAP/E2020 research team, such a limit regarding the reliability of the concerned statistics discredit them into nothing more than mere contextual information (if not pure fantasy).

As Chris Isidore, CNNMoney.com senior writer, correctly stresses it in his article on January 5th, "The fourth quarter gain was below the third quarter and 2006 saw 143,000 fewer jobs added to payrolls than in 2005, or almost a month's worth of hiring. And that's a comparison to a year in which hurricanes Katrina and Rita took a bite out of jobs".

While John Williams from the Shadow Government Statistics underlines that "Highly unusual reporting and revision patterns for the jobs data were seen again, for December. Employment conditions are close to showing a recession, but each month the Bureau of Labor Statistics keeps filling in prior periods with levels of upside revisions that are unprecedented outside of the annual benchmark revisions. The revisions are unusual enough for the BLS to have published a statement last month proclaiming that the changes were not unprecedented. Something very strange is going on in the reporting".

More about the real evolution of US economy in GEAB N°11 to be released on January 15th (on subscription...

Lundi 8 Janvier 2007

GEAB N°46 - Contents

- Published on June 16, 2010 -

Global systemic crisis / Second half of 2010: The global system’s four single points of failure
The second half of 2010 will thus correspond to a new step in the global geopolitical dislocation, characterized by an acceleration in the process of strategic, financial, economic and social convulsions centered on four single points of failure of the international system... (page 2)
Subscribe

Western public debt: When insolvency becomes intolerable
Between now and the end of 2010 the whole world will have learned all the lessons from the « Greek crisis ». In fact, there are only two lessons to learn from… (page 5)
Subscribe

European austerity: When contextual growth is abandoned in favour of structural stability
In speaking of the Eurozone we have written about « a policy » of austerity and not « policies of austerity » as indeed Germany now sets the standards on the subject... (page 8)
Subscribe

Chinese inflation: When China is going to begin exporting its inflation
As anticipated by LEAP/E2020, the Chinese new impetus plan is coming to an end and opens up two connected problems... (page 12)
Subscribe

US contraction: From « hidden mass austerity » to « imposed Federal austerity »
The November 2010 mid-term elections will be the first electoral test of a United States in crisis... (page 14)
Read public announcement

Second series of elements for a methodology of political anticipation: Questions about source material and team management
Second series of excerpts from the Manual of Political Anticipation which LEAP will publish in October 2010. (page 19)
Subscribe

Strategic and operational recommendations for the second half of 2010
US municipal bond market (« munis »): The major shock
Currencies: The hurricane will strengthen with even higher waves!
World stock markets face the unthinkable
Gold, cash, precious metals, real estate… (page 23)
Subscribe

The GlobalEurometre - Results & Analyses
Those polled are now unanimously agreed (a rare case for the GlobalEurometre) calling for the establishment of European and Asiatic rating agencies so as to no longer depend on the goodwill of Moody’s, Fitch and Standard & Poor’s.… (page 26)
Subscribe

Special subscribers’ announcements
EU-Russia seminar, Nice, September 23/24 septembre, 2010
Political Anticipation Academy, cycle 2010-2011 (page 30)
Subscribe

Full page