Friday, December 2, 2022

Convince me that "Jobs Added" is a meaningful metric

According to FRED, about 60% of Americans admit to being gainfully employed.

For all practical purposes, that is 200 million people.

Traditionally, 4% unemployment was considered "full employment" as some number of workers will be between jobs (moving to a more highly paid job, typically) or coming off of maternity leave or whatever. 4% of 200M is 8 million workers.

This is where things get murky. There are 10 million more jobs being offered than people looking for jobs. There are also about 200k (or maybe 300k)  people coming across the border looking for work.

So if "payrolls" increase by 200k then the economy is standing still.

If payrolls increased by 300k then it mean the 200k who slipped across the border got jobs AND 100k tapped out and either took a second job or decided to get off the couch and go to work. Retirees having to go back to work because their pensions no longer cover basic living expenses is hardly a rousing commendation of how the economy is being managed.

Did the economy actually "expand"? There are still 10 million more job openings than people looking for work.

The number of "jobs created" tells me nothing when there is no additional context.

Another issue lurking in the woodpile are the jobs that will evaporate when people actually start looking for work. It is conceivable that a company like Starbucks is advertising for 20 positions knowing they will be lucky to get 5 people who work out. So how many jobs would you post if you needed 5 employees? Five jobs or twenty jobs?

So, the Fed is driving interest rates partially based on the metric "number of jobs added to payroll". The metric is folded, spindled, mutilated, pounded with a meat tenderizer and sweenieized against the 200 day moving average. It is as synthetic as a slice of generic, American Process Cheese.


  1. The problem with the Fed is that they are always looking backward, and they cannot seem to predict what everyone can see.
    If they were a decent management, they'd be forward looking and adjust on what they have NOW, rather than a few months in the past.
    Reactive, rather than proactive.

  2. All metrics are meaningless if they are lies.........

  3. There are several federal unemployment indices; the one normally referenced is U3, which I understand is the lowest and most manipulated.
    I've read that the U6 is a better measure but don't know the details.

    As far as the "200k added" number, does it include seasonal adjustments? IIRC, the initial release is actually an estimate and the real number comes out a few months later - and is almost always lower.

  4. The Market Ticker has this covered nicely

    Short answer is Garbage IN, Garbage OUT.

    If you're like a hard-working friend of mine with three part time jobs trying to get ahead your 3 JOBS in their eyes.

  5. The first mistake is assuming the government is trying to help us. Once you accept that, you see their manipulation of statistics for the fraud that it is.

    1. Agree. The goal is to crash the economy without appearing to crash the economy, then usher in the cbdc as the 'solution'


    1. Establishment vs household survey is all you need to know.

      Lies, Lies, Lies…

  7. Such a thin line between these two videos besides time and access to the perpetrators. Both parents share the same rage of loss:


    May God sort it all out

  8. Lies, damn lies and statistics. Especially true when dealing with anything coming out of Mordor On The Potomac.

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