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Figures lie; Liars figure…
Location: Blogs Russ Henke |
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| Posted by: Russ Henke |
11/7/2007 6:09 PM |
The Figure: Real US gross domestic product (GNP) -- the output of goods and
services produced by labor and property located in the United States -- increased
at an annual rate of 3.9% in the third quarter of 2007, according to advance
estimates released by the US Bureau of Economic Analysis at the end of October
2007.
The Lie: “The proves that the economy of the US is strong and resilient.”
The Facts: The advance estimate of GNP proves nothing. It’s a very preliminary
estimate. The dramatic impact on GNP of the value of the US dollar being at record lows
against foreign currencies has yet to be analyzed.
The Figure: The US economy added 166,000 jobs in October 2007, the fastest pace in
five months, the Labor Department said.
The Lie: “The proves that the economy of the US is strong and resilient.”
The Facts: (1) Even if accurate,166,000 is well below the level needed just to
take care of the number of people entering the US job market every month from
sheer population growth. (2) Nearly half of the October gain in private jobs came
from an estimate that the Labor Department makes each month about how many jobs
were added by new businesses, known as the “birth and death” model. The Labor
Department did not actually find evidence of these jobs; it merely assumed they
were created based on historical patterns. (3) The 166,000 estimate of overall
October job growth followed a far lower 96,000 gain in September, which itself was
revised down from the previous estimate of 110,000. US payrolls today are actually
increasing at the slowest annual rate since June 2004. (4) US Manufacturers lost
21,000 jobs last month, their 16th consecutive decline. Retail businesses cut
21,500 employees from their payrolls. The declines underscored analysts’
expectations that consumer spending will slow, further hurting the economy. (5)
The US unemployment rate held steady at 4.7% percent in October, the highest rate
since August 2006, but only because the survey found that more of our people
simply gave up and stopped looking for work and were therefore not counted by the
government as unemployed.
The Lie: “The economy of the US is strong and resilient.”
The Facts: Wall Street suffered its second big drop in a week November 7, 2007,
with investors worried about spreading fallout from the credit crisis at US banks
and about a US dollar that just keeps getting weaker. The Dow Jones industrial
average fell more than 360 points — just about matching its deep pullback of
November 1, 2007. (2) Oil hit another record on November 7, 2007, rising above $98
per barrel before retreating slightly, and gold pushed higher, moves exacerbated
by the anemic US dollar. (3) The “US core inflation rate” (which excludes food
and energy costs) is under control, which is great as long as US citizens don’t
eat, drive, or try to heat their homes.
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