Ben Treece: The numbers don’t lieWritten by Ben Treece | | firstname.lastname@example.org
On Feb. 3, the Bureau of Labor Statistics (BLS) released its most recent batch of data showing that the private sector created 243,000 new jobs. Economists have been reveling in the numbers and taking these new figures as a sign that the economy is ready to go on a tear. The bad news regarding this figure is that it was fabricated out of thin air; the government lied.
It is no shock that the government manufactures and manipulates data; it has been doing it for decades.
Most economists are intelligent enough to verify or discredit government numbers by doing independent research, but many well-known professionals have been blindly accepting these government-manufactured statistics (The best example of this was Suze Orman on “Real Time with Bill Maher,” gushing over this data). It is a shame that with all of the degrees they have, books they’ve written and supposed intelligence they posess that these “best and brightest” of the financial industry can be so naïve and stupid.
According to Lee Adler and the Wall Street Examiner (via WashingtonsBlog.com), when you examine the raw data you can see that January 2012 was a horrendous month for job creation. To quote WashingtonsBlog.com, the total number of employed persons fell by 737,000 last month.
January also showed a steep decline in labor force participation rates and a record number of people leaving the workforce, such as persons who have given up looking for employment, employees who have accepted part-time work but would like full-time employment, persons whose unemployment benefits have run out, etc. Popular financial blog ZeroHedge.com pointed out that 1.2 million people dropped out of the labor force last year. If a person has “dropped out of the labor force,” he or she is no longer considered unemployed for statistical purposes.
The clearest proof we have that more people are not gaining employment comes through tax receipts. When we look at federal tax receipts we can see that they have been relatively flat since April, which forces the question, how can tax receipts be steady when more people are supposedly in the workforce and paying payroll taxes? The answer is that more people are in fact not being employed.
The federal government is trying to paint this pretty picture going in to an election year to keep the incumbent in power. That is not a politically charged statement, but merely a fact of life. Whether it be Republican, Democrat or independent, black, white, brown, purple or orange, Washington always wants to see the incumbent back in power. They are more predictable and easier to influence. The federal government has been doing this for decades, it is no longer a surprise and the market does not buy into it, however many prominent economists do. The lesson to be learned here is to never take published figures at face value. As Ronald Reagan said, “Trust, but verify.”
Ben Treece is a 2009 Graduate from the University of Miami (Fla.), BBA International Finance and Marketing. He is a discretionary money manager with Treece Investment Advisory Corp (www.TreeceInvestments.com) and a stockbroker licensed with FINRA, working for Treece Financial Services Corp. The above information is the express opinion of Ben Treece and should not be construed as investment advice or used without outside verification.