There is No Economic Recovery: 35,000 Fewer Jobs in May Despite 411,000 Temporary Census Hires
The private sector is in a Depression. The public sector is on a deficit financed bender. Policy makers are overtly manipulating data to make the economy look healthier than it is. The source of the downturn remains intact, continues to erode economic activity and has been exacerbated by the Government's misguided policy response. This is not going to end well.
May Unemployment
The jobless "recovery" continued in May as 35,000 fewer people were employed, and the labor participation figure dropped by 322,000. These dropouts allowed the reported Unemployment Rate to fall to 9.7%.
Total non-farm payrolls increased by 431,000 due to the Census hiring 411,000 temporary workers. The private sector, which creates sustainable jobs, is not hiring. There will be no economic recovery until this occurs undistorted.
Long term unemployment figures continue to worsen with people out of work for more than 27 weeks rising 47,000 during the month. In four months the Average and Median Duration of Unemployment has increased by 4.2 and 3.3 weeks. Meanwhile the percentage of long term unemployed has increased by 4.8% from January.
Long term unemployment is a crisis that shows no signs of abating. Stimulus and Census hiring has had no beneficial effect on this trend. Shortly these workers will be laid off which may lessen the slope of the incline by increasing short term unemployment, but the problem will remain.
Highlights of the May Figures
Stimulus spending was never going to work because the conditions necessary for a successful Keynesian response do not exist. Secondary to this fatal flaw is the inevitable influence that bloated state and local governments will have on the nation's unemployment rate. For 18 months local agencies have retained costly and unnecessary headcount paid for by the Stimulus Spending Bill.
Now that Stimulus money is running out, local reductions will belatedly transpire. This predictable outcome may have begun last month.
The following is a list of Federal, State and Local government employment in April in May. The month-to-month changes are interesting.
- The only real hiring activity is occurring within the Federal Government; an entity which is running multi-billion dollar deficits and lumbering towards insolvency
- The entirety of this net hiring was attributable to the Census and will reverse itself shortly
- May might have been the inflection point where state and local governments begin to reduce employment as a net 22,000 individuals were laid off
Manipulating Unemployment Data Via the U.S. Census
At 8pm on May 27th (four days prior to month's end) I received a call from the U.S. Census Bureau. They were looking for people to immediately fill a new class of trainees to begin work the following morning. The bizarrely short notice and the requirement of 4 consecutive days of training made the opportunity available only to the unemployed.
It was articulated to the 14 members of the training class that there was little need for the new recruits. The hiring was a mystery as there was insufficient work to keep existing enumerators busy and the operation for which the class was being trained was to end shortly.
It is entirely possible that:
- The project will end before recruits receive approval to perform the duties for which they were trained
- Recruits will spend more time in training than performing actual Census functions
I can only assume that similarly timed hiring, training and waste is occurring nationwide. It is my conclusion that the U.S. Census is being misused as a shadow stimulus project, manipulated to increase employment figures, and as an alternative mechanism for disseminating welfare payments.
Dismal Reality
There is no economic recovery, only a coordinated, deficit-financed distortion which is unsustainable and will be revealed in the near future.
Whitney, as I am sure you are aware, the Net has been rife with discussion on the impact of Census hiring on this Depression's unemployment figures, to the extent of open questioning as to what measure the government may be intentionally manipulating operations to serve as a 'shadow stimulus', as you charge. While the idea is definitely interesting at first glance, I must respectfully disagree with your conclusions here.
By its very nature the Census is a 'stimulus program', and thus so it was also in the year 2000, 1990, etc. There is no good reason to assume that the same waste and inefficiencies did not exist in the decades prior; they were still federally operated programs, after all. Likewise, and as to 'timed hiring', the surveys took place at the same time of the year, and the largest hirings have always occurred, and peaked, in the same month of May. Further still, the increase in hires of May '90/'00 was magnitudes larger than the increase of May '00/'10, so where were all the calls for gross padding or manipulation in May 2000? (http://www.esa.doc.gov/02182010.pdf)
The bloated and inefficient program is a decennial stimulus 'by default', not by design. In my view these allegations of additional 'manipulation' are, at best, without merit, and at worst a red herring diverting attention away from the real machinations that lie in the BLS 'adjustments'.
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Excellent observations all.
If I have joined an online group of conspiracy theorists it was unintentional.
The Census is a decennial, stimulus project that is both a necessity and disastrously inefficient. I intend to codify a list of some of my more interesting observations upon the conclusion of my assignment.
Normally Census hiring does not generate accusations of employment manipulation because it is a routine, temporary event which was planned years in advance.
This time around though the Census is occurring in the midst of the largest stimulus spending in history. It is taking place in an environment where, as you observe, employment data is being manipulated, along with GDP figures, real estate prices and indirectly the stock market. Public policy makers have done everything within their power to create and maintain the narrative of a recovery.
It appears that the ruse's design is to maintain a credible facade through the upcoming November election.
Given extraordinary efforts to convince people that a recovery is underway, partially by manipulating unemployment figures and funneling stimulus money into the economy, I think it is reasonable to examine the otherwise routine Census as a tool which might be misused to further the "recovery" narrative.
I am not arguing that hiring is greater than in past Censuses nor do I dispute that the bulk of hiring occurs at the same time of year each decade. I only observe the peculiarities of my particular experience.
- My class was hired under strange circumstances, in hurried fashion at the end of May
- The hiring was a surprise to all involved in the training process and no preparations for our employment had been made
- No one in my class was needed or has been productively disposed
- None have even been authorized to perform Census functions
- Yet each member is paid daily to attend meetings at which nothing transpires
This may simply be another example how government does not work and why we need to stop wasting so much money on its bloated operations.But the Census workers with whom I have spoken believe that the Government ramped up hiring at the end of the process when no further employees were needed. These unnecessary employees are being paid a lot of money to do nothing. While I do not know this as fact, similar last-minute and unnecessary hiring could have occurred nationwide.
I observe the possibility that in a month where private sector hiring disappeared, that policy makers in possession of this data took advantage of an opportunity to intentionally hire and pay tens of thousands of unnecessary workers to both lower the reported unemployment rate and inject another round of stimulative payments into the economy. This hiring will certainly reverse itself shortly, but if the goal is to keep the economy propped up until November, and policy makers are willing to use all available tools to keep it afloat, it does not seem unreasonable that this temporary patch might have been intentionally applied.
I accept the possibility that I may be paranoid and/or delusional.
Follow Up 1: On Tuesday, June 8th I was informed that the Census project for which my class was trained ends Saturday, June 12th (4 days from now). Participants have yet to be approved to perform their duties.
Follow Up 2: Just read WSJ article noting that President Obama indicated on Wednesday, June 2nd that he expected to see a strong jobs report on Friday, June 4th. This is bizarre given how bad the report ended up being (the DOW fell 3.2% on the news). While the President is not privy to the Dept. of Labor's official unemployment statistic, he does have access to Census figures. The Obama Administration apparently transferred oversight of this Census from the Commerce Department to the White House.
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