Business

Tricks but no miracles in recent jobs report

As I said in last Thursday’s column, the “experts” always overestimate the amount of job growth in January. And I also said it would have taken a miracle for the amount of new jobs produced last month to reach the level that Wall Street was expecting.

Well, there were no miracles. In fact, the “experts” were shockingly bad in their guess on this January’s number, which was released Friday morning.

I’ll explain my next predictions in a minute. But here are some basic details you’ll need to know before I can further pick on the “experts” as well as the politicians who use these labor numbers to try to deceive Americans.

The number of new jobs created last month, the government said in its report, added up to just 36,000. That compares with the 150,000 new jobs that the “experts” were expecting.

Keep in mind that 150,000 jobs are not even enough to absorb new people trying to enter the workforce for the first time, much less find jobs for the unemployed.

And the unemployment rate in Friday’s report fell by a laughably large 0.4 percentage points to 9.0 percent, which of course the Labor Department chose to highlight in the first sentences of its release.

Let’s deal with the unemployment rate first.

As I also said in last Thursday’s column, this figure has become completely unreliable because it declines as people become frustrated and stop looking for work.

So, if taken to the extreme, the jobless rate will end up at zero when everybody who is unemployed throws in the towel and simply stops sending out resumes or looking in the help-wanted ads.

That’s just the way the jobless figure is tabulated.

The Labor Department also announced in its latest report that it had over-counted by 452,000 the number of jobs it previously thought had been created in 2010. President Obama loves to say in speeches that 1.3 million jobs were created last year.

He can’t anymore because the new figure is just 909,000, and many of those were temporary Census 2010 positions.

Do the math. That’s an average of just 75,750 jobs a month — about half the number needed just to accommodate people first entering the work force. There are now about 7.2 million fewer jobs than before the so-called Great Recession.

And America has had awful job growth despite the fact that Washington and the Federal Reserve have thrown the kitchen sink at the problem — often ignoring the fact that throwing a sink around can do more harm than good.

As hard as it is to believe, last Friday’s number could have been even worse.

As I said in my last column — and many times before — the number of new jobs reported in January is always reduced because of something called the birth/death model.

The model is an estimate by the government of the number of jobs created (birth) — or killed (death) — by small companies that its surveys can’t reach.

January is one of the very few months in which the Labor Department assumes jobs disappear rather than are created by these tiny entrepreneurs.

In January 2010, the Labor Department assumed that 427,000 jobs were killed by these small companies. This January the model guessed that only 339,000 jobs were eliminated.

In other words, if Labor had used anything near last January’s 427,000 figure, this January’s headline number could have been negative instead of showing the paltry 36,000 job growth.

Here’s some good news. In just a few months, the birth/death model will start assuming that large numbers of jobs are being created — “born” — at small companies.

So the Labor Department’s statistics will make everything look brighter in the spring. This happens every year, although the “experts” and the politicians somehow haven’t figured it out yet.

OK, now I’m going to shock you a little. Everything I just wrote is meaningless to Americans looking for work.

The Labor Department calculations — with its birth/death model, seasonal adjustments and random hocus-pocus — don’t truly reflect what is going on in the job market.

Last Friday’s number is really just important for Wall Street traders who try to guess market reactions to Washington announcements.

So what is really going on with the job market? If you look at ADP, which is a private- sector company that studies tax filings, job growth picked up substantially at the end of last year.

That’s because retailers started hiring for the holidays. In the six months before that, growth averaged just 52,000 jobs a month.

But even that doesn’t tell the whole story be cause ADP does not count government work ers who are being fired as part of budget cutbacks.

According to Challenger Gray and Christmas, another private research firm, 142,255 government workers were part of announced layoffs in 2010. And public employees are likely to suffer more layoffs in the months ahead as local governments deal with budget deficits.

Bottom line: job growth stinks. But it isn’t ebbing and flowing nearly as much as the government’s number would have you believe. jcrudele@nypost.com