The mainstream media continues to rely on job statistics to portray a positive economic outlook. However, recent reports have raised doubts about the accuracy of these numbers. In a surprising turn of events, the widely watched JOLT survey, which measures job openings and quits, was deemed bizarre by Zero Hedge. Additionally, the Bureau of Labor Statistics made significant revisions to their real hourly compensation estimates, revealing a staggering drop of 4.7% instead of the previously reported 0.7% increase.
Ordinarily, real compensation fluctuates by a certain percentage each year, making the BLS’s revision highly unusual. This discrepancy suggests either a complete incompetence on the part of the BLS or intentional manipulation of the data initially reported by the press. According to statisticians, who are often influenced by government interests, the number of job openings skyrocketed by nearly 360,000, contrary to a year-long trend of decline. This figure was approximately 700,000 higher than the Wall Street consensus and even exceeded the highest Wall Street estimate. These irregularities raise questions about the accuracy of Wall Street’s ability to predict job numbers and hint at possible anomalies within the statistical data.
Further supporting the argument for distorted numbers is the contradicting information in the same report regarding job quits. Job quits, typically seen as a sign of individuals’ fear of finding replacement jobs, plummeted to a two-year low. Such a situation seems unlikely when job openings are soaring and surpassing all expectations. It is plausible that government statisticians genuinely try their best to provide accurate data, but their limitations may prevent them from seeing the full picture. JOLTs, like many other government statistics, rely on questionnaires sent out to companies, with the hope that they will be diligently and truthfully filled out. However, the response rate has been declining over the past decade, reaching an all-time low of 31% during the COVID-19 pandemic. Companies, already understaffed and occupied with pressing matters, may not prioritize completing these surveys, thus skewing the sample.
Statistically speaking, a drastic change in the sample size, such as a drop from a 70% response rate to 31%, necessitates a thorough examination to understand the underlying factors. If struggling companies stopped responding, the data would reflect only growing companies that are actively hiring. Alternatively, if certain companies, like government contractors, are more likely to respond, the statistics would no longer represent the entire job market but rather focus on government spending. Rectifying these sample biases requires significant effort and resources, making it unclear why the BLS would be motivated to debunk job numbers that benefit the administration responsible for determining their annual budget.
Coincidentally, two recent jobs reports have been released, both exceeding Wall Street estimates by nearly 50%. However, the lackluster market response to the first report suggests that investors may no longer trust these statistics. This loss of faith in official figures leaves us with shadow indicators such as credit card usage and household budgets, further eroding confidence in the accuracy of government statistics.
As we continue to observe the situation, it becomes crucial to critically assess the reliability of these figures in determining the true state of the economy. – Until next time, stay informed and stay vigilant.