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Wednesday, November 26, 2014
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Wall Street Invents NEW Jobs Propaganda

Articles & Blogs - US Commentary

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As I have previously stated, the economic propaganda which the U.S. government calls “statistics” do not just represent exaggerations of actual data – but often simply complete fabrications. The most obvious example is that any and all state-by-state data shows the U.S. economy still plummeting downward, while “national” data (i.e. the aggregate total of the state-by-state data) shows the U.S. economy mildly improving.

I already pointed to one specific example of this (see “BLS jobs numbers contradict BLS jobs numbers”), also involving employment data: the fact that the measurements of unemployment by the Bureau of Labor Statistics on a state-by-state basis did not come close to equaling the national numbers (the total of the state-by-state numbers).

This is far from the only example of BLS fiction. It's monthly jobs reports simply have no connection to the real world, generally representing (at best) no more than 1/3rd of actual job losses – and usually much less than that (see “U.S. Economy to Lose 20 MILLION Jobs This Year”).

Now, the “economists” at JP Morgan have joined-in in distributing jobs fiction. In keeping with its Wall Street reputation, the ridiculous “analysis” released by JP Morgan makes even the lies of the BLS appear tame in comparison. In totally re-writing the recent economic history of the United States, JP Morgan is now claiming that the U.S. economy can stop losing any more jobs (on a net basis) even with the weekly lay-offs remaining at 500,000 jobs.

Prior to the recent crash in the U.S. economy (i.e. when the economy was proclaimed “healthy”), when weekly lay-offs exceeded 300,000 per week the U.S. economy began losing jobs – a pattern that was true at the beginning of the current collapse. To believe the outrageous fiction from JP Morgan implies that the U.S. economy became 60% stronger (or simply grew by 60%) during this crash.

It will be interesting if any other propaganda outlets also begin to distribute this nonsense, or whether it will be limited to the article published by Bloomberg – given that this particular piece of propaganda is far more extreme than any other economic fiction since the U.S. Greater Depression began. With weekly lay-offs at 500,000 (roughly 2.2 million per month), this implies net, monthly job losses of well over 1 million per month.

Keep in mind that as weekly lay-offs increase that hiring does not increase with it, nor does it even remain steady. As a matter of logical necessity and economic fact, when lay-offs increase hiring falls (and vice versa). Thus we can deduce approximate job losses – resulting in estimates which are certainly closer to reality than BLS fiction.

If the “tipping point” for the U.S. labor market occurs when lay-offs enter the range of 1.25 – 1.5 million, then we know that hiring roughly balances at that level. When lay-offs increase by 60%, it is certainly reasonable to expect a commensurate drop in employment. Thus, at current levels of lay-offs, U.S. employers are likely only generating somewhere around 600,000 new positions. If we take 2.2 million lay-offs and subtract 600,000 new positions, we end up with a net monthly job-loss of over 1.5 million jobs.

In contrast, last month's estimated job losses by the BLS were less than 200,000. Now, today, the “economists” at JP Morgan are trying to dupe people into believing that the economy is losing no jobs – and the 1+ million people losing their jobs (on a net basis) each month are simply a figment of our imagination.

This is not a perfect representation of the U.S. labor market. The reported payroll changes in the weekly lay-offs only represent part of the labor market. However, absent additional detailed data, there is no reason to assume that the non-reported segments of the U.S. employment market (such as “under the table” employment) are not exhibiting similar ratios in hiring to job losses. Certainly, such estimates are far superior to the “calculations” of the BLS – because they are derived from real numbers.

The only actual analytical value of the nonsense spewed out by JP Morgan is in asking ourselves why JP Morgan chose to try to pass off a lie of this magnitude. One obvious answer leaps to mind: JP Morgan expects lay-offs to remain at or above 500,000 per month indefinitely into the future. If this was not their expectation then there would have been absolutely no point in JP Morgan releasing this fiction (and subjecting itself to ridicule). If lay-offs were to quickly fall to 400,000 per week (or less), then no one would care whether the U.S. economy could “tread water” with weekly lay-offs at 500,000.

Extrapolating further, we can assume that JP Morgan expects net job losses to remain at or near the current level of 1.5 million per month. This, in turn, implies that the U.S. economy will likely lose well over 10 million jobs next year, as well.

The fact that Wall Street sees it necessary to engage in this level of deceit is also revealing in that it indicates that the propagandists, themselves, certainly do not place any credence in another one of their “statistics”: that the U.S. economy is currently growing at an annualized rate of 3.5%. If reality was anywhere close to this “statistic” then we would see the statistical fiction becoming more plausible – rather than less so – because there would be no need to engage in deception of this magnitude.

Thus, when we “read between the lines”, we see that the banksters and the U.S. government do not believe the economy is improving to any significant degree. More importantly, they do not expect any significant improvement in the foreseeable future.

Remember this when you read (and interpret) future U.S. economic “statistics”.

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