There were some 'screaming headines' at some blogs this morning about the BLS Birth Death Model, aka the 'imaginary jobs report, reaching some new heights, or lows if you will, of perfidy in misstating jobs growth with a reading of 206,000 imaginary jobs added. In fact the number was in line if not historically a bit low for a May adjustment. It showed the type of seasonal hiring one might expect for the beginning of summer. The seasonality factor was also very much in line. I give the government very little credit on its statistical reporting, and have been a strong critic for many years, and take a back seat on debunking Washingon to no one. But there was nothing particularly unusual in this month's report. It was bad enough on its own. The recovery has never really gained any organic traction and for reasons that I have cited repeatedly before the fact. I deseasonalize and back out the imaginary jobs each month, and post what the monthly jobs number would look like without them as shown below. It's a choppy picture even with the seasonality factor. This is why I prefer to watch a moving nine month average. And I also greatly prefer to watch the changes in median wage, which is probably as much or more important than the actual jobs added. The longer term 'trend' has not yet turned lower, and seems consistent with a stagflationary outlook. It is obviously in danger of rolling over, but it has not done so just yet. America had been adding jobs for over twenty years with stagnant wage growth. And this was a result of the partnership between corporate America and the wealth few with the government policy makers, including the Greenspan Federal Reserve. Warren Buffett called it a class war and there is no need to guess which class controls the discussion through the concentration in the mainstream media. The public cannot even mount a serious reform effort without it being quickly co-opted and used by a well-heeled propaganda machine. As Simon Johnson famously observed, there was an economic coup d'etat in the States, and it is still having its way with the public and much of the world at large. And the reaction against the Anglo-American banking cartel, and their infamous economic hitmen, is the substance of the currency war. A structural reform of the system is what is required, not short term stimulus or austerity. And in particular not austerity or more tax cuts for the wealthy which is the hallmark of an intellectually bankrupt theory of trickle down privileges and mindless privatism. The US economy is severely distorted after years of ideological abuse with an outsized financial sector and a bias towards domestic jobs destruction through an abandonment of public policy investments in favor of short term corporate profits. And there is no reform because the political administration of the system and those who observe and report on it has been generally captured and corrupted, and is stuck in a credibility trap.
Jesse
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