David Letterman-style, David P. Goldman lists the 10 reasons to “scrooge” the unemployment number the government announced last Friday.
10. As noted, nearly 300,000 people disappeared from the labour force, yet the BLS reports no increase in “discouraged workers” or workers forced to take part-time jobs for economic reasons.
9. Private sector service jobs supposedly increased by 51,000, yet the National Institute of Purchasing Managers’ (NIPM) survey shows that services employment fell during November. The unexpected drop in the NIPM report, which is a reasonably good advanced indicator of economic activity, doesn’t square with the BLS report.
8. The reported improvement in services was driven by an 86,000 increase in temporary employees in “administrative and support services”. There almost certainly is an element of truth in this report, but it is not necessarily good news. The biggest hiring boom stems from the huge backlog of home foreclosures. With one out of eight American homeowners behind on mortgage payments, the Wall Street Journal on November 19 reported, “Mortgage restructuring for strapped homeowners has emerged as a rare growth area in the economy as companies in the field keep hiring. Four of the largest mortgages servicers – Bank of America Corp, Citigroup Inc, JP Morgan Chase & Co and Wells Fargo & Co – have collectively hired almost 17,000 people this year, mostly to work with financially ailing homeowners. With the number of defaults rising, many are planning to keep adding staff.”
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