by
Joel B. Pollak
5 Oct 2012
Suspicion about the federal government's September jobs report has fallen on Secretary of Labor Hilda Solis, who appeared on CNBC this morning and defended the numbers from the Bureau of Labor Statistics (BLS), claiming--falsely--that upward revisions of 86,000 jobs were from the private sector. In fact, the new number is entirely accounted for by upwards revisions to state and federal government payrolls. The BLS reported that while only 114,000 jobs were created in September--which would have translated into a rise in unemployment from 8.1% to 8.2%--the unemployment rate fell dramatically to 7.8%. That unusual drop is the fastest in nearly three decades, and was unexpected even in the rosiest predictions.
Suspicion about the federal government's September jobs report has fallen on Secretary of Labor Hilda Solis, who appeared on CNBC this morning and defended the numbers from the Bureau of Labor Statistics (BLS), claiming--falsely--that upward revisions of 86,000 jobs were from the private sector. In fact, the new number is entirely accounted for by upwards revisions to state and federal government payrolls. The BLS reported that while only 114,000 jobs were created in September--which would have translated into a rise in unemployment from 8.1% to 8.2%--the unemployment rate fell dramatically to 7.8%. That unusual drop is the fastest in nearly three decades, and was unexpected even in the rosiest predictions.
One reason for the rise was an upward revision of 86,000 to the July and August jobs numbers--all of which came from a 91,000 increase in the estimate of public sector jobs. Private sector job estimates were actually revised downward by 5,000.
In addition, the BLS reported a large rise in the number of part-time jobs, adding 600,000 jobs to the total--a dramatic increase of 7.5%, not explained by any other economic indicators--and raising questions about whether the government had changed the way it counted part-time workers.
Solis was adamant today in defending both the revisions and the BLS's methodology for counting part-time workers--relying largely on the upwards revisions for July and August jobs (emphasis added):
CNBC: We're getting bombarded by people who do not believe the number. They believe this number was fixed and typed to coincide with Election Day. What do you say to them?...I'll rephrase the question. A lot of people do not believe the 7.8 number. They believe that somehow BLS fixed this to coincide with the election cycle. What is labor's response?
Solis: You know, I'm insulted when I hear that because we have a very professional, civil service organization where you have top, top economists that work at the BLS. They've been doing these calculations. These are -- these are our best trained and best-skilled individuals working in the BLS, and it's really ludicrous to hear that kind of statement, and I say that because just look at the -- we have to look at what happens across the board, not just in one month, but look what happened in the last two months. We also saw revisions there upwards of 86,000 additional jobs added and this brings us now to 5.2 million private sector jobs across the board, we saw 104 private sector jobs created....
CNBC: Before I let you go, you say skepticism over the numbers are ludicrous. You say you're insulted. Is there a danger, you believe, when large sections of the country don't believe the data. Not that it's ever been considered gospel, but when you have disbelief how much danger is embedded in that?
Solis: I will tell you that we look at each report differently. We just saw revisions for the last two months and this happens. I mean, these are estimates that obviously, the BLS puts out. They do the best calculation, using the best measurements and tools and we've been using them for the past 70 years. We haven't changed anything and the information that I received is given to me by our professional, civil service staff in the BLS.
Note that Solis describes the 86,000 upward revision as if it were an increase in private sector jobs, though in fact the increase came entirely from revisions to public sector payrolls by cash-strapped federal and state governments. Instead of shedding jobs, as previously claimed, governments have been adding jobs.
Big Government
