Mainecoons
08-05-2014, 05:02 PM
When it comes to the all-important monthly payrolls number which sets the tone for risk over the next month, one of the biggest variables in the BLS' "estimate" (because all jobs numbers are that: statistical estimates) of US jobs is the monthly birth-death adjustment. What this monthly fudge factor is, in a nutshell, is the BLS' estimation for how many new businesses are created over the period offset by older "dying" businesses, leading to incremental jobs that are only polled by the BLS with a substantial lag.Here is how the BLS explains this adjustment (http://www.bls.gov/web/empsit/cesbd.htm):
To account for this net birth/death portion of total employment, BLS uses an estimation procedure with two components: the first component excludes employment losses due to business deaths from sample-based estimation in order to offset the missing employment gains from business births. This is incorporated into the sample-based estimate procedure by simply not reflecting sample units going out of business, but imputing to them the same trend as the other firms in the sample. This step accounts for most of the birth and death employment.
To be sure, in a normal, vibrant, growing and most importantly, entrepreneurial economy, incorporating business creation vs business deaths is a perfectly reasonable statistical adjustment to the actual number of underlying jobs via the BLS business sampling that takes place every month.
There is one problem: the Fed's centrally-planned abortion of an "economy", in which the rigged, bubble market is the only leading indicator that everyone focuses on and from which everything else "flows", is anything but normal.
The latest proof of just how broken the economy has become, and serves as a big flashing red question mark about just how massively overestimated job creation is due to a wildly erroneous birth/death estimator, comes from a research report by the Brookings Institute.
Note this expose is coming from the liberal Brookings think tank.
http://www.zerohedge.com/news/2014-08-05/4-million-fewer-jobs-how-bls-massively-overestimated-us-job-creation
And here's the confirmation: Lower and lower collection of payroll taxes. That's what happens when fewer people are working at poorer and poorer quality jobs.
8506
To account for this net birth/death portion of total employment, BLS uses an estimation procedure with two components: the first component excludes employment losses due to business deaths from sample-based estimation in order to offset the missing employment gains from business births. This is incorporated into the sample-based estimate procedure by simply not reflecting sample units going out of business, but imputing to them the same trend as the other firms in the sample. This step accounts for most of the birth and death employment.
To be sure, in a normal, vibrant, growing and most importantly, entrepreneurial economy, incorporating business creation vs business deaths is a perfectly reasonable statistical adjustment to the actual number of underlying jobs via the BLS business sampling that takes place every month.
There is one problem: the Fed's centrally-planned abortion of an "economy", in which the rigged, bubble market is the only leading indicator that everyone focuses on and from which everything else "flows", is anything but normal.
The latest proof of just how broken the economy has become, and serves as a big flashing red question mark about just how massively overestimated job creation is due to a wildly erroneous birth/death estimator, comes from a research report by the Brookings Institute.
Note this expose is coming from the liberal Brookings think tank.
http://www.zerohedge.com/news/2014-08-05/4-million-fewer-jobs-how-bls-massively-overestimated-us-job-creation
And here's the confirmation: Lower and lower collection of payroll taxes. That's what happens when fewer people are working at poorer and poorer quality jobs.
8506