Census Hiring Used to Manipulate U.S. Employment Numbers

The 'Helicopter Economics Investing Guide' is meant to help educate people on how to make profitable investing choices in the current economic environment. We have coined this term to describe the current monetary and fiscal policies of the U.S. government, which involve unprecedented money printing. This is the official blog of the New York Investing meetup.


According to the Financial Times, the U.S. is hiring 1.2 million census workers for the 2010 national head count that starts in April - twice as many as were needed for the 2000 census. While census workers are government employees, they do not appear to be showing up under the government category in the monthly non-farm payrolls employment report (hiring began by March 2009). The Bureau of Labor Statistics appears to be counting these temporary jobs in the Business and Professional Services category. As a consequence, the employment numbers make the U.S. economy look much better than it really is.

The March employment report indicates that the U.S. lost 36,000 jobs in February and the unemployment rate was 9.7% if certain discouraged and forced part-time workers are not counted (unemployment would be 16.8% if they were included in the numbers). Any job loss indicates an extremely weak economy, but so does a small job gain. Since new workers are always entering the labor force, the total number of jobs available needs to continually increase, by as much as 200,000 a month by some estimates, in order to maintain employment stability. A lesser number should lead to a higher unemployment rate. Nevertheless, unemployment held steady in February and actually dropped significantly in January when 26,000 jobs were lost. Interesting, to say the least. Apparently two plus two doesn't always equal four.

Examination of the detailed numbers within the monthly employment reports reveals that the lower rate of job losses in the last several months can be attributed to the hiring of large numbers of temporary workers in the Business and Professional Services category. In February, a net 47,500 such workers were hired, in January it was a net 50,200 and in December 2009 a net 49,700.  The numbers are remarkably even and that makes them look like part of some planned operation.  A footnote indicates that these temp workers include hiring in 'other' industries not shown separately. At the same time, government jobs supposedly decreased by 18,000 in February and decreased by 26,000 in December 2009. If the 1.2 million census workers were being included in the government employment figures, this would indicate massive lay offs have been taking place elsewhere in the government. Surprisingly, it doesn't seem that any such lay offs occurred. So where are the census workers in the U.S. employment reports?

Everyone knows that increases in government jobs don't indicate a recovering economy. It is also common practice for businesses to hire temporary workers in the early stages of a recovery and then permanent workers later on. If the federal government's statistical operatives placed temporary census workers in the Business and Professional employment category, it would certainly make the U.S. employment picture look much better than it really is. Regardless of where the census workers are being hidden in the statistics, their jobs are temporary and should completely disappear by the fall. U.S unemployment will increase by 1.2 million when that happens. It's not clear where the U.S. will get the jobs to make up for the loss.

Disclosure: None

NEXT: Stocks Experience Irrational Exuberance on Employment Report

Daryl Montgomery
Organizer, New York Investing meetup
http://investing.meetup.com/21

This posting is editorial opinion. Like all other postings for this blog, there is no intention to endorse the purchase or sale of any security.