The story of America’s job growth is more complex and nuanced than the government wants us to believe. In a world where job numbers wield significant influence over perceptions of economic health, it’s crucial to scrutinize the data—and the methods behind their presentation—closely.
In his latest podcast, Peter Schiff delves into the murky waters of government economic reporting.
This morning’s non-farm payroll numbers blew past expectations:
The January number, the consensus was 170,000 and we got 353,000 jobs, so more than double the estimate. But even if you look at the consensus range of estimates, the low number was 120,000, the high number was 200,000, so we almost doubled the high end of the range. Also, the unemployment rate fell from 3.8% to 3.7%, so more good news, right? The unemployment rate is lower.”
Even in manufacturing, jobs showed strength:
Even manufacturing, 23,000 manufacturing jobs versus the 5,000 that had been expected. That’s one of the biggest increases in manufacturing jobs despite the fact that manufacturing is in a recession, and all the manufacturing numbers are horrible. For some unexplained reason, during this manufacturing recession, there’s all these manufacturing jobs that are being added.”
But Peter then points out a peculiar pattern of how job numbers are initially reported versus how they’re revised later:
We’ve gotten into a pattern where the government reports a much stronger number and everybody celebrates… but then they quietly revise down the previous number… it turns out that it wasn’t a beat after all, it was a miss.”
It’s like celebrating a touchdown before realizing the play was offside.
Breaking this pattern, today’s non-farm payroll report threw a curveball with an unexpected upward revision. It seems almost too convenient:
This time… instead of revising it down, they revised it all the way up… maybe the government saw that a lot of people were calling out this pattern and so they decided to do this to kind of stop that way of thinking.”
The abrupt change in pattern raises eyebrows and questions about the consistency and reliability of these reports.
Peter highlights the stark contrast between government-reported job growth and figures from private entities like ADP and Challenger, Gray & Christmas:
According to ADP, which is a private company but they’re surveying the same jobs that the U.S. government is surveying… this excludes government jobs, so it’s just the private sector, but they reported 107,000 private sector jobs for January and 158,000 for December. The government said that we had 317,000 private sector jobs in January and 278,000 private sector jobs. Why is the government coming out with so many more jobs than the private sector?”
This discrepancy between the rosier government portrayal and the more subdued private sector data supports the notion that job growth reports are inflated:
The government, of course, has an agenda… clearly, they want to report strong job numbers… When you have a huge divergence between what an unbiased private sector company calculates and what a totally biased government reports, who are you going to believe?”
Peter also touches on a critical aspect often glossed over in government reports—the nature of the jobs being added:
According to that household survey we had a loss of jobs… a huge decline in full-time jobs offset by a gain in part-time jobs… all of the jobs that have been added have been part-time jobs… If you go back over the last year, all of the jobs that have been added have been part-time jobs. It’s just that we’ve added more part-time jobs than we’ve lost full-time jobs.”
The employment landscape might not be as robust as many believe. The shift towards part-time work suggests underlying economic weaknesses, not strengths.
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