For Your Consideration

While stock market participants are recovering from the bona fide temporary financial collapse yesterday, it is reasonable to turn our gaze to the unemployment rate figures released today. While increasing to 9.9% (due primarily to more people looking for jobs as their 99 week unemployment benefits run out), the press is reporting that employers added 290,000 new jobs.

Hmmm… What?

When these numbers are broken down, this narrative is subject to a certain refinement. For starters, 66,000 of the 290,000 are census workers- jobs that are not likely to last once census activities finish. Further, 188,000 were added solely by virtue of the “birth-death model”, a statistical model first utilized by the Bureau of Labor Statistics in June, 2003.

Accordingly, a case could be made that the economy really added 36,000 new non-farm jobs, not 290,000. And because we all know that statistical models cannot be manipulated, all is well. 

So today’s unemployment news, coupled with the market legerdemain yesterday naturally leads me to a cognitive dissonance- that “uncomfortable feeling caused by holding two contradictory ideas simultaneously”.

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Hat tip to Zerohedge, by far the best advanced financial site available to mere mortals.

This entry was posted on Friday, May 7th, 2010 at 12:10 and is filed under Investment, Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.