- Don't get too excited about all those new jobs that were
supposed to have been created in April.
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- I'm not going to waste a lot of my precious space on
this, but the bottom line is that most of the 288,000 jobs that the Labor
Department says were created last month may not really exist.
-
- They could be figments of statisticians' optimism.
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- Anyone who plodded through my column last Thursday knows
I predicted that job growth in April would be better than the 160,000 to
170,000 jobs that the "pros" were anticipating.
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- But I also said, quite emphatically I hope, that the
stronger growth would be an illusion - the result of the Labor Department's
computers making happy predictions about seasonal job creation that could
neither be verified nor justified.
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- I'll explain one aspect.
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- Back in the March employment report, the government added
153,000 positions to its revised total of 337,000 new jobs because it thought
(but couldn't prove) loads of new companies were being created in this
economy.
-
- That estimate comes from the Labor Department's "birth/death
model." You can look up these numbers on the Department's Web site.
-
- As staggering as the assumption about new companies was
in March, the Labor Department got even more brazen in April.
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- Last Friday, it was disclosed that these imaginary jobs
had been increased by 117,000 to 270,000 for the latest month - because,
I guess, the stat jockeys got a vision from the gods of spring.
-
- Without those extra 117,000 make-believe jobs, the total
growth for April would have been just 171,000 - sub-par for an economy
that's supposed to be growing at more than 4 percent a year, but right
on the pros' targets.
-
- Take away all 270,000 make-believe jobs and, well, you
have the sort of pessimism that the political pollsters are seeing.
-
- If I was the suspicious type (and if I thought Washington
was smart enough), I'd suspect a nasty motive behind the sudden surge in
these mystery jobs. But for now, let's just acknowledge their existence.
-
- Also keep in mind that the government doesn't distinguish
between good companies being created and, say, a guy doing consulting work
out of his basement because he can't find real work.
-
- What does this new job announcement mean in the real
world?
-
- It means there will be more pressure on the financial
markets, as we've seen for a while but especially since last Thursday.
-
- It also means that the Federal Reserve now has the excuse
it needs to raise interest rates in June (as I've said before would happen)
and will probably start regretting that move by the end of the summer.
-
- And President Bush will probably give in to temptation
and start crowing about the economy, going against the mood, as captured
by pollsters.
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- This will make him look as out of touch with reality
as his father did.
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- * Press reports say they are thinking of removing a 9/11
plaque from the New York Stock Exchange because it's unduly flattering
to former Chairman Dick Grasso, but I hear they are also replacing all
the round, shiny doorknobs in the building.
-
- It seems they remind too many people of the top of Grasso's
head. (If you have an "I hate Dick" story, please send it to
me.)
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- * Here's some more bad news about Iraq.
-
- A source in the intelligence community tells me that
the U.N. oil embargo of Saddam Hussein was worthless because Iraqi oil
was being shipped all these years to a Caribbean island called St. Eustatius,
unloaded into onshore tanks and then reloaded into U.S.-bound tanker ships.
-
- The same switcheroo is being done with Iranian oil, I'm
told.
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- Oh, and the source says Washington would rather nobody
know about this.
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- Copyright 2004 NYP Holdings, Inc. All rights reserved.
http://www.nypost.com/business/23936.htm
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