You are not going to like this column. I’ll be upfront about that.
But like your mother used to say, just open wide and swallow the medicine. It might not taste very good (or in this case, be pleasant to read), but it’ll eventually make you feel better.
As you know by now, the employment report that was released last Friday showed that the nation’s job situation in May was lousy.
Even the most ardent supporters of the ‘Pollyanna Theory of Economic Doubletalk’ — the main tenet of which is that even if one job is created it’s better than none — would agree about how dismal May looked.
First, the basics. The Bureau of Labor Statistics reported that 430,000 new jobs appeared in the US economy in May.
That, of course, would be reason for profound joy, except for the fact that 411,000 of those jobs were temporary, part-time positions created by the US Census.
And we don’t really know whether the Census is making its employment statistics look better by churning workers and hiring unnecessarily. (More on that in a sec.)
That leaves us with 19,000 “real” jobs — certainly nothing to rejoice about in an economy where millions are unemployed and 150,000 new jobs a month are needed just to absorb people entering the work force.
By the way, congrats to all college graduates!
If you are one of them, you might not want to read further, because the job market is really a whole lot worse than advertised and gives a whole new meaning to the old admonition “stay in school.”
And if you are in any way familiar with the job market — by trying to find work, say, rather than just following government numbers — at this point in my column you should start taking comfort in the fact that the hopelessness of the situation isn’t all in your head.
It’s not. In fact, withholding taxes during May declined sharply, confirming what you are feeling down in your gut — people just can’t find work and less taxes, in total, are being forked over to local and federal authorities.
Now, here’s what everyone else failed to tell you.
Included in Friday’s report were the Labor Department’s guesses as to how many new jobs were created by small, newly formed businesses that the government is unable to count. (Unable to count because they probably don’t exist.)
These estimates were proven to be totally wrong last year, and the Labor Department was forced to reverse itself by removing 1.2 million jobs from its total in the annual benchmark revision this past February.
This guess has an official name: the Birth/Death model and you can search for it on the Bureau of Labor Statistics Web site. Since this 2009 guesstimate was abysmally wrong, you’d think Labor would tone down its optimism this year, right?
Wrong! The BLS thinks small businesses that it hopes — but again can’t confirm — exist created 215,000 jobs this May, compared with 186,000 in the same month a year ago. I’ll repeat, those 186,000 jobs did not exist last May. So why should the BLS be any more right with this year’s guess of 215,000?
The real employment situation may not be improving much, but there’s a noticeable boom in the make-believe job market.
*
What a mistake President Obama made!
Last week the president leaked the entirely inaccurate notion that last Friday’s job report would make people happy. And for a day, Wall Street was.
What was he thinking?
Either the president had no notion that the employment gains would be largely made up of Census workers jobs, in which case nobody would care, or he was completely misled about the nature of the report.
In the latter case, whoever gave him the inaccurate in formation and caused him to look foolish should be among those losing their jobs next month.
Even more puz zling was Vice Pres ident Joe Biden‘s prediction weeks ago that 500,000 new jobs would be pro duced in May.
Careful guys! The markets are very fragile and politicians expendable.
* More on the Census on Thursday.