Paul Craig Roberts
Institute for Political Economy
Friday’s payroll jobs report is another government fairy tale or, to avoid polite euphemisms, another packet of lies just like the House of Representatives Resolution against Russia and every other statement that comes out of Washington.
Washington is averse to truth. Washington can only lie.
First let’s pretend that the 321,000 new jobs that the government claims the economy created in November are true, and let’s see where these jobs are.
Specialty trade contractors, which I think are home and office remodelers, accounted for 20,000 jobs. I doubt that people are putting money into houses and buildings that are worth less than the mortgage.
Manufacturing accounted for 28,000–a very high monthly figure for recent years, one that is unbelievable in view of the rise in the trade deficit and declines in consumer spending on furniture (-3.8%), major appliances (-8.3%), women’s apparel (-17.7%), and household textiles such as towels and sheets (-26.5%), and when US business investment consists of corporations repurchasing their own stocks.
The rest of the claimed jobs are in private domestic services, that is, they are third world jobs. Retail trade claims 50,200 and transportation and warehousing claims 16,700. These numbers are impossible to believe in view of the closings of middle class department stores and Black Friday and Cyber Monday sales flops.
Financial activities claims 20,000, most of which appear to be insurance related–perhaps the growth of Obamacare bureaucracy.
Professional and business services claims 86,000, a very large number for recent years. What are professional and business services?
Professional and business services are “accounting and bookkeeping services” (16,400 jobs)–a possible (temporary) increase as W2s for 2014 are coming due to be issued–and ”administrative and support services (40,600 jobs)–mainly temps.
Next we come to “health care and social assistance” with 37,200 jobs concentrated in “ambulatory health care services” and “social assistance.”
Then we have “food services and drinking places” with 26,500 claimed jobs.
Bringing up the rear is Government employment with 7,000 jobs.
What are we to make of these job claims?
It is unlikely that there were 26,500 new jobs for waitresses and bartenders when consumer spending on restaurants, alcohol, and entertainment declined by 3.8%, 4.5%, and 5.4% (Source). Restaurants and bars do not hire more people when demand is dropping.
No one hired 50,200 new retail clerks when anchor stores of shopping centers are closing and strip malls stand abandoned in unfinished construction.
If we are sufficiently gullible to believe the BLS jobs report of 321,000 new jobs in November, we should be disturbed that the vast bulk of the jobs are third world domestic service jobs that do not produce exports to offset the massive trade deficit of the US offshored economy. Moreover, the majority of these jobs do not produce sufficient income for a person to establish a household or qualify for a mortgage or car loan.
America is bleeding herself dry so that corporate executives and shareholders can live the high life on bonuses and capital gains resulting from exploited foreign labor and the destruction of the American middle class.
Now, let’s move on to other conclusions. John Williams, an expert on government statistical data, points out, ignored of course by the presstitute media, that full-time employment in America today is 2,400,000 less than employment in 2007.
What this means is that the US is short 2.4 million jobs from 7 years ago. So how is there an ongoing recovery? In the meantime the population has grown.
Remember, the official unemployment rate is low, because discouraged workers who cannot find jobs are not counted as unemployed. To be counted as unemployed, you have to be actively searching for a job. As job search is expensive and unemployed people have no money, when job search produces no results people give up. They are unemployed but not counted as such.
John Williams points out that most of the 321,000 new jobs were created by manipulating seasonal adjustments and by the birth-death model that arbitrarily adds jobs that the BLS model assumes were created that month. The BLS never provides any proof of those phantom jobs.
John Williams also points out that many of the payroll jobs are part-time jobs and one person often has several jobs. As no one can live on one part time job, many households and individuals are sustained by multiple part-time jobs. The jobs are not a measure of the number of employed, because many persons hold several jobs in order to make ends meet.
Keep in mind that much of the increased activity in the highly touted payroll employment numbers is tied to multiple part-time jobs held by individuals. In other words there is double and triple counting of those employed.
The alleged “recovery” is based on severely understated inflation. When an item in the inflation index rises in price, a lower priced item is substituted for it or the price increase is called a “quality improvement” and not registered in the inflation index. This keeps the official inflation rate low. Therefore, when nominal GDP is deflated by the understated inflation index, real GDP growth is the result. The growth is an illusion. In fact, the “real” GDP growth is merely the non-measured price rises or inflation that is not captured by the erroneous methodology.
There is practically no official inflation, but somehow the price of ground beef rose 17 percent during the year (Source). Presstitutes and PR flacks explain away the price rise as the result of drought while others blame the price increase on smaller beef herds.
With inflation outpacing the growth of real incomes, consumer purchasing power is falling. Real spending fells with the fall in purchasing power. John Williams’ inflation estimates are much higher than the government’s and indicate that the bulk of the population is experiencing extreme financial hardship.
An economy based on consumer spending cannot grow when real consumer incomes and/or consumer credit do not grow. As these are not growing, the “recovery” is a fiction created by a measure designed to understate inflation.
In the 21st century “democratic” Western policymakers have brought about an extraordinary concentration of income and wealth in elite hands, while subjecting the vast majority of Western populations to financial stress.
The ladders of upward mobility have been taken down. A new aristocracy of wealth has been created along with a militarized police state to defend the aristocracy’s interests. A political-economic-social system has been created in the West in which only the elite have a stake.
This stake is based on a house of cards. The utterly corrupt central banks of the West, a collection of gangsters, have kept the house of cards standing longer than I thought possible. But it will be a historical first if a house of cards stands forever. The derivatives exposures of four American banks exceed by several times the world GDP. There is no way these exposures are covered by the banks’ capital or by their depositors deposits.
Wall Street and the presstitute media have manufactured the impression that all is well, and those fools driven by greed have gone along with the manufactured impression. But the facts are otherwise.
This article first appeared at Paul Craig Roberts’ website Institute For Political Economy. Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His Internet columns have attracted a worldwide following.
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