[MarkJ]

When the government releases Friday’s employment report, nearly a million jobs could be erased. The change won’t show up in the monthly report. Rather, the expected drop will show up int he government’s revised job losses from April 2008 to March 2009, showing the labor market was in much worse shape than we knew at the time.


The revision comes every February. But this one, initially projected by the Labor Department to be -824,000, will be the biggest in 18 Years.

Blame the birth/death model for the revision. Built on years of research, the model's key assumption is fairly simple: most of the time jobs created at new companies make up for losses at companies that close.

Since the last boom began in 2003, the U.S. economy added just over 8 million jobs and subsequently lost about 8 million jobs in the recession. The birth/death model however, steadily forecasted new companies and new jobs, by an average of 55,000 a month.

In October, Keith Hall, Commissioner of the Bureau of Labor Statistics, said most of the coming revision "appears to be due in part to an increase in the number of business closings," short-circuiting the model's assumption that deaths are offset by births.

The Labor Department says there are flaws in its models and its monthly employment survey but it defends the process, saying the annual employment revisions are small and stable. That was true of most years since the birth/death model was first used in 2000. But not for the 2008 revision later this week.

That leaves economists and the rest of us to wonder what the error rate is from April 2009 onward - numbers that won't be revised until February of 2011. What we do know is the birth/death model has generated hundreds of thousands of jobs since April of last year - jobs which may get revised away in the final analysis.

Interactive Chart at Bloomberg http://www.bloomberg.com/insight/birth-death-model.html

[Roy]

it's amazing how anyone can give any credibility to gov numbers when they keep releasing data that show "look everything is getting better... see here"

yet later, they quietly revise everything downward. The downward revisions of old data has been going on for a while, and now it's finally getting some attention.

I think that people are waking up to the true nature of the fedgov, albeit slowly. Articles like this are enabling it, at least among the population that gets their news in printed form. I doubt this story will make the TV news, but I could be wrong.

Good find MarkJ!

[Armageddon]

This will offset the 1 million census workers they are hiring, so nobody will notice the adjustment.

[mcgowanjm]

it's amazing how anyone can give any credibility to gov numbers when they keep releasing data that show "look everything is getting better... see here"

yet later, they quietly revise everything downward. The downward revisions of old data has been going on for a while, and now it's finally getting some attention.

I think that people are waking up to the true nature of the fedgov, albeit slowly. Articles like this are enabling it, at least among the population that gets their news in printed form. I doubt this story will make the TV news, but I could be wrong.

Good find MarkJ!

The problem is that this number's been out for at least three months. But the gatekeepers weren't reporting it so...ZZZZZ

And to get up to date, one of the guys who've been reporting
the true conditions.

Thing is and that's why I'm talking about "we're having the wrong conversation", this problem will never be solved. We've accumulated so much debt we'll never be able to pay it off. And so the financial world is dead on arrival. As are most politicians. They're all stuck in a defunct model. And now the people are going to take over, and it'll be ugly. Obama could have prevented it, but chose not to do so.

So the American people, out on the streets, will have to come up with the Plan B their government refuses to supply. We're stuck in the middle of a mastodont political crisis, and we don’t even see it, and not even just in the US, and nobody'd be talking about it but those who better not talk at all.-Ilargi

[Plantagenet]

This will offset the 1 million census workers they are hiring, so nobody will notice the adjustment.

The loss of 1 million productive full-time jobs in the private sector is not "offset" by the creation of 1 million temporary, low-wage jobs in the government sector.

Mish on the census worker scam

[jdmartin]

it's amazing how anyone can give any credibility to gov numbers when they keep releasing data that show "look everything is getting better... see here" yet later, they quietly revise everything downward. The downward revisions of old data has been going on for a while, and now it's finally getting some attention.
I think that people are waking up to the true nature of the fedgov, albeit slowly. Articles like this are enabling it, at least among the population that gets their news in printed form. I doubt this story will make the TV news, but I could be wrong. Good find MarkJ!

No doubt - yesterday's headlines said that 20k net jobs were lost in January but the unemployment rate fell by almost half a percent. I guess lots of workers died, and that made a bunch of slots that offset the net lost jobs It's total Expletive deleted.. People quit looking for jobs because there aren't any, and they magically stop being unemployed

[mcgowanjm]

Worse, 1.8 million have dropped out of every EUC
program except food stamps.

I expect there's an exploding Black Market in Food Stamps
happening as we speak.

And according to deCarbonnel,
Over half of the US soybean crop has been consumed in first four months of the 2009/10 crop year.

And that's assuming USDA 'record 09/10' crop numbers.
Which are bogus.

And so it all comes back to what we at the Automatic Earth have been saying all this time. A rising US dollar when trouble comes, gold not great in the short term, and a downturn on the horizon like you’ve never ever seen, let alone imagined.

[mcgowanjm]

BTW, Mish nailed it.

All the Table/Charts on the BLS have been re arranged.

If you can't Bedazzle them with Brilliance, Befuddle
them with Bull shit.

And Oil broke $70. We can find all the oil we want by
crushing the economy.

[shortonsense]

I expect there's an exploding Black Market in Food Stamps
happening as we speak.

Is there a common way to circumnavigate the newer biometric debit card systems, or are you referring to the old coupon system ( assuming anyone even still uses it anymore ) ?

[Tanada]

I expect there's an exploding Black Market in Food Stamps
happening as we speak.

Is there a common way to circumnavigate the newer biometric debit card systems, or are you referring to the old coupon system ( assuming anyone even still uses it anymore ) ?

The system used around here is nothing like biometric, from getting stuck in the grocery line behind recipients I have learned all you need is the CARD and the PIN number to access its funds. It works just like my bank debit card except I put my money in the bank and my taxes put money in the recipients accounts.