It’s time for the Bureau of Labor Statistics to own up to the fact that the nation’s unemployment statistics have been compromised.
Friday’s jobs report should come with a big asterisk detailing all the investigations the BLS knows about.
Maybe the BLS thinks it can’t afford to be that honest. But I say it can’t afford not to be — if it wants to maintain the long-term integrity of all its statistics.
I’ve been telling you for months about the investigations being conducted by the Inspector General at the Census Bureau concerning the falsification of unemployment and inflation data. Probes are also going on at the House Oversight Committee, Congress’ Joint Economic Committee and, probably, the Philadelphia US Attorney’s office.
I do know the BLS is privately expressing lots of concern — although it and the Labor Department haven’t said a word publicly.
It is time for them to do so.
The honest thing would be to warn the public, the financial markets and policy makers. Staying quiet about the investigations is dishonest.
Here’s an example of what’s been going on behind the scenes at Census, which compiles statistics for the monthly jobs report that BLS will release Friday at 8:30 a.m.
Ever since I broke the news in October that employment and inflation data were falsified in 2010 and 2011, Census has been having difficulty meeting the quota set by the Labor Department for its surveys. The Philly office, in particular, has been coming up short in getting the nine out of 10 successful interviews that the Labor Department requires.
Back when it was cheating, Philly easily got the 90 percent. Now it’s not even coming close.
For the survey that will be released Friday, the Philly region couldn’t even get its response rate up to 88 percent. And that was after the Labor Department allowed it (and the other five regions) to keep the survey open for an extra day and a half.
The bottom line: Philly suddenly can’t produce enough interviews. And that tells me falsification occurred well after 2011.
Is the same fraud going on at other Census districts? That will be the second phase of the probes.
For the record, Wall Street thinks the BLS will announce 185,000 new jobs were created in March. Others are more optimistic because they think that the severe winter delayed hiring, which will now come gushing out.
Jobs always increase in the spring when the weather improves. But “seasonal adjustments” intend to flatten out that blip so numbers can be compared better. The optimists are counting on better weather this year to produce job growth that’s higher than normal.
Others think Federal Reserve chief Janet Yellen started talking about the weak labor market this week because she’s expecting bad numbers Friday. (Note: Yellen shouldn’t know the figures that far ahead of time.)
The unemployment rate — the figure being probed — is expected to drop to 6.6 percent, from 6.7 percent.
Here’s what I think: For March, the BLS does not make generous assumptions for hypothetical job growth coming from companies that are supposed to be created every spring. This assumption is called the birth/death model.
So if there isn’t a weather-related spurt, as Wall Street expects, Friday’s number could disappoint.
However, the next three months — April, May and June — will be helped by very generous birth/death assumptions. That will make job creation look better than it probably is and will give the Fed greater confidence (probably false confidence) in reducing its “quantitative easing” bond purchases.
All of this, of course, assumes that you believe the BLS numbers haven’t been fabricated — but we already know that they have.
The California State Board of Equalization — that state’s equivalent of a tax department — will be hosting a symposium on “Sales Suppression and Detection Techniques.”
I know because the hosts have asked for permission to distribute two of my columns about so-call “zappers” — high-tech cash registers that make sales and, therefore, sales tax, disappear.
The symposium is April 28 and 29.
I first investigated this issue in 2011, and hoped Albany would start catching tax cheats. I wrote about it again after California passed a law earlier this year outlawing zappers.
Albany isn’t interested, although I’ve been told tax officials did hold a meeting. Hooray for meetings!
On another tax issue: The Post carried an editorial last Tuesday about revenue lost by Albany because 57 percent of cigarettes smoked in New York are being brought into the state illegally. That’s another big hole in New York’s finances.
As readers know, I’ve championed this issue for a number of years. And there will be more to come in the weeks ahead.
The 57 percent figure comes from the Tax Foundation and was based on an analysis done by the Mackinac Center for Public Policy.
The issue is simple: New York’s cigarette taxes are the highest in the nation. So people are finding ways around this by bringing either untaxed or lightly taxed smokes into the state. And nothing is being done about it.