Back by popular demand (OK, only three people asked for this), here are my predictions on the future job market.
I am not talking about the real job market here. I’m referring only to the numbers put out each month by the Labor Department that pretend to tell us what’s happening in the work-a-day world.
As I mentioned in last Thursday’s column, the experts — and I use that term disparagingly — were expecting too much from the November jobs report released on Friday.
The people who get paid millions to know these things were anticipating growth of 150,000 jobs.
They got just 39,000, along with a disturbing 0.2 percentage-point jump in the unemployment rate.
Why were they wrong and why was I right? Because these “experts” still don’t understand the adjustments used by Labor, especially those made for the various seasons of the year as well as guesstimates put into the monthly figures for jobs that newly created companies are supposed to be creating (but really aren’t.)
Labor calls this last part the Birth/Death Model, and it has been responsible for more erroneous employment reporting than anything else over the years.
Anyway, a couple of sources of mine and I cracked the Labor Department code a long time ago. So, without further ado, here are my predictions:
– Barring any major change in the economy, the December job figures that will be released in January won’t be either shockingly bad or surprisingly good.
– However, the January jobs figure, which comes out on Feb 4, will be awful.
That’s the (only) month the Labor Department automatically subtracts a large number of jobs from its actual count because it thinks — but also can’t prove — that small companies are quietly going out of business and releasing employees.
Worse, the Labor Department will correct past mistakes — as it did last February — and tell us how many of the jobs it previously claimed existed really don’t. Right now the number seems to be around 360,000 — and counting.
The department will probably eventually admit that it overcounted by about 600,000 jobs. That would wipe out about two-thirds of the job growth Washington has been claiming for this year.
And skip February’s numbers, reported in March — nothing important there.
– But when we get to next spring, the Labor Department should start reporting better jobs figures, even if the economy doesn’t perk up.
Because of guesswork on the department’s part, the spring months always show improving employment numbers — even when the economy is doing zilch.
Someday the economy might actually gather some momentum. Until then, the only thing that matters in making predictions is understanding how the Labor Department’s computers roll the dice.
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Ben Bernanke is a liar.
The Federal Reserve chairman went on “60 Minutes” this past Sunday to defend his controversial quantitative easing plan, now in its second incarnation.
This is the plan by which the US government, acting like a shill in the audience of an auction, purchases its own securities in an effort to keep bond prices up and interest rates down.
Bernanke told “60 Minutes” that the “myth is that we are printing money. We are not printing money.”
Back before Bernanke was made chairman of the Fed he described his hare-brained quantitative easing scheme like this: “The US government has a technology, called a printing press — or today, its electronic equivalent — that allows it to produce as many dollars as it wishes at essentially no cost.” [Crudele column, Nov. 26, 2002]
Bernanke was just a Fed governor the November when he made that statement to a group of economists.
He promised — to The Post — that he would use this option only if there were deflation, like we have today in many asset categories.
So, was Bernanke merely playing word games with Scott Pelley, the “60 Minutes” correspondent who conducted Sunday’s interview and brought up quantitative easing ?
Could this electronic money be, in Bernanke’s nimble mind, different from the actual, physical printing of currency?
Creating electronic money has the same effect as printing dollars — it adds liquidity to the banking system and could potentially lead to rampant inflation.
Worse, it could result in the abandonment of the US currency by foreign investors.
This would lead to higher interest rates on loans, something that’s been happening since Bernanke announced the second phase of his QE program in November.
The first problem — inflation — can already be been seen in the recent runup in commodity prices as specu lators look for protec tion against currency craziness in physi cal assets like gold, oil and non-pre cious metals.
But Bernanke is making matters worse by saying two quantitative easings may not be enough.
Last year he committed $1 trillion to buying back US government bonds. Recently he pledged another $600 billion.
Bernanke’s actions may be keeping the stock market up, but they’re doing little for the economy, which is — even if you believe the government’s numbers — growing at just a modest pace.
So, Ben, own up to it! “60 Minutes” may have believed you, but do you really think anyone who actually understands this stuff thinks the Fed just happened to have $1.6 trillion lying around to be used in this shill game? jcrudele@nypost.com