Will Wall Street be wrong again on this Friday’s employment report?
You might have noticed that I’m enjoying the fact that the very highly-paid experts in the financial community can’t figure out what’s what with the government’s monthly count of new jobs allegedly being created by our supposedly recovering economy.
That’s because the “experts” don’t understand one important thing — the report is made up of nonsensical, worthless guesstimates that are meant to be corrected many times before the number is truly to be believed.
And the normal assumptions being made by the Bureau of Labor Statistics (BLS) are WRONG for a number of reasons, including the fact that the economy in which we now live is anything but normal.
So, let me attempt to continue my winning streak by guessing — as they say in the bookmaking business — the over/under of the jobs report.
The consensus on Wall Street is that the government will announce that 200,000 new jobs were created in May, down from 244,000 in April. The financial experts guessed too low on the April number and I believe they will do the same thing for May.
Friday’s job gains will be better than 200,000, primarily because May is a month in which the BLS will probably add about 210,000 jobs that it thinks — but can’t prove — are being created by companies that are just starting out.
The BLS is the most generous, in fact, during May in counting these probably non-existent new company jobs. This foolish estimate is called the Birth/Death Model in case you want to look it up and be smarter than the million-dollar economists on Wall Street.
I don’t want to confuse anyone, so let me sum up: the economy is obviously slowing down and the jobs being counted now by the BLS probably don’t exist. So these job gains will be corrected away in what the government calls a “benchmark revision” early next year.
But the strong (though fictional) growth will still put the Federal Reserve in a bind this summer, when inflation rises because those stats are also inaccurately being estimated.
(Note: If Friday’s number isn’t better than expected, then watch out. It means that job growth is so slow that even the BLS’s magic stats can’t make it look good.)
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Who said nothing good has come out of the Great Recession? (Oh, maybe that was me!)
Charles Schwab’s 2011 Teens and Money Survey earlier this year questioned 1,000 kids between 16 and 18 and found that they — have a pulse.
And, they also have a newfound respect for savings, appreciation of their parents’ hard work and gratitude for the things they have. (Excuse me as I wipe away a tear.)
And nine out of 10 say they have been “affected by the recession” although it’s unclear if having to make do with last year’s iPhone is reason enough to respond affirmatively.
Remember what happened to the folks who grew up during the 1930s Depression — they were changed for the rest of their lives. Will today’s teens be similarly changed?
We can only hope.
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Could it really be true — as sources of mine alleged in my column last Thursday — that arcane rules of Finra, the Financial Industry Regulatory Authority, are causing hiring to slow on Wall Street?
Well, I got calls from at least a half dozen people who say they’d be hiring more workers if Finra wasn’t preventing them from doing so.
Since Finra proved so uncooperative and deceitful when I was researching that last column, I’m going to stick with this topic for a while longer until I get un-pissed off.
Stay tuned.