MCViewPoint

Opinion from a Libertarian ViewPoint

Snow Job: Fed Admits Gov’t Job Estimates too High by Over 1-Million, which Means Serious Peril! – The Great Recession Blog

Posted by M. C. on December 19, 2022

Whether they happen will depend on whether the Fed realizes its serious error in perception soon enough to avoid tightening longer into a recession they do not acknowledge and whether Fed and Feds join again in printing and distributing money, which will be much less likely this time due to inflation and the higher cost of government debt. So, we may just get economic collapse without the hyperinflation.

https://thegreatrecession.info/blog/snow-job-fed-admits-gross-errors/

Having written that Powell’s Peril Lies in the Lanquishing Labor Market and that we are Fed up and Under-Fed All at the Same Time because Everyone Sings the “Strong Labor Market” Tune in Unison … and They’re All DEAD Wrong, I finally get some VINDICATION! Major vindication!

Until now, I’ve read no one agreeing with my views about Powell’s labor blindspot being a source of peril for all of us, which could prove to be the biggest Fed error in history.

I’ve pointed out in past years how badly cooked the government’s jobs numbers are and how the Bureau of Lying Statistics, as I call it, revises its numbers down by hundreds of thousands in an annual audit just about every year, but mostly by applying the corrections to months so far back in the year that no one cares anymore about what happened back then. That makes for a convenient way to bury the truth about a weak labor market. I’ve also noted how I’ve seen the BLS revise December’s raw job numbers up by 300k or more due to unusually bad weather in one year, only to revise the next December up again by the same amount due to unusually good weather.

Moreover, since September, I’ve been saying the labor market is the worst blind spot the Fed has ever exhibited. Its misbelief that the labor market is strong is causing it (and everyone who parrots whatever the Fed says as gospel truth) to be blind to the recession we are already in (on the basis that our negative GDP numbers this year just HAD to be wrong, given how tight and hot the labor market is).

More importantly, I noted in my last article how the Fed said more clearly than ever that it will not stop tightening the nation’s financial system until it sees the labor market loosen up with a rise in unemployment. That affirmed what I’ve said since September is the most important thing for you to keep your eye on if you want to understand what’s about to befall us — that the Fed will over tighten during a recession it does not see because of its gross minundertanding of the labor market, which is far weaker than the Fed admits.

Yesterday we got the biggest mea culpa of all time regarding the government snow-job world of job estimating and Fed complicity in the falsehood. Zero Hedge reported, “Here Comes The Job Shock: Philadelphia Fed Admits US Jobs “Overstated” By At Least 1.1 Million“:

Just a little over a million? I’m sure that’s a Fed rounding error. ZH started by noting the two government labor reports put out by the BLS have spread in greater and greater disagreement with each other since last March.

Zero Hedge

It was only a matter of time before we would see which would catch up or down to the other, and ZH had been putting its money where I would, which is that the lower number in these recessionary times is clearly right, while the higher number is the one with the past of being grossly overestimated then revised down.

However, that was their old chart. The divergence in the monthly continued to accumulate until it looked like this:

See the rest here

Be seeing you

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