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Jobs number once again totally skewed

February 4, 2011

The unemployment report is one of the least reliable reports out there.  Barry says as much. But he forgot one of his best points ever – that the Birth/Death Adjustment used by the BLS misses the inflection points in the job market.  Barry said this back in 2007 and it is still a vaild point today.  The adjustments used by the BLS make this particular report very suspect at turning points in the hiring cycle.

According to the tax numbers, we’re doing much better than the unemployment statistics represent.  We’re about 4.5% higher in taxes collected than last year.   With this level of taxes collected, we should have much better unemployment numbers than the one we just had.   I suspect that 1 year from today, we’ll get some revision that says as much.

Please be aware that this skew happens at the inflection points.  During the middle parts of the cycle, the numbers are far more reliable.

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