America's Outsourcers to be Reclassified as Manufacturers

Don't like the trade deficit, low GDP and the public outrage over the offshore outsourcing?  Change the accounting method to make it go away!  Such is the agenda of government statisticians it appears.  How they are going to incorporate statistical lies into national accounts is shocking.  Production location no longer matters, the thing that will count is ownership of the final product.

You Can't Blame The Economy On The Weather

The pathetic jobs report has ushered in a whole new blame game on the weather. January through March 2012 had the warmest temperatures on record for the United States.

Most economic data, including the employment report, is seasonally adjusted. The algorithm is called X-12-ARIMA and is maintained by the Census. Without going into the mathematics, this algorithm takes past cyclical patterns that are predictable and adjusts those spikes, attributed to the seasons. The algorithm takes out of an economic data series those wild swings, so one can more easily compare real growth instead of, say, fall harvesting or Christmas hiring. Construction employment, for example, is highly cyclical due to the nature of the work. Below is a graph of not seasonally adjusted construction employment.

construction nsa

About Those 1.252 Million People Who Dropped Out of the Labor Force

evildoerThe January unemployment report created quite a stir. Many believed the BLS had simply dropped 1,252,000 people out of the labor force, discarded like trash. Is the BLS an evil doer as so many declare, or could the culprit possibly be the 2010 Census?

We already showed how comparisons between December and January cannot be done due to the incorporation of the 2010 Census data and the yearly population controls, benchmarks and seasonal adjustments incorporated into the January unemployment statistics.

While there is no mythical 1.252 million dropping out of the labor force, there are some highly unusual numbers in the BLS population controls.

The BLS starts the January month with revised population estimates, seasonal adjustments and benchmarks. This year the 2010 Census data was also incorporated into the BLS statistics. They do not go backwards in these revisions. The BLS does not backwards adjust December 2011. Here are the BLS population controls for 2012:

China and India Really Are Cheap Labor in Manufacturing

Everybody has heard the reason manufacturing goes to China and services jobs are offshore outsourced to India is cheap labor. Well, there appears to be more than a grain of truth to this claim. The BLS maintains an international labor comparison statistics site. Manufacturing labor costs in China and India are 4% of the United States for 2009.

manufacturing costs region 2009

At the same time though, European labor costs are much more than the United States and one of the reasons Germany's economy is so strong, is their exports and manufacturing sector. Germany clearly has bucked the trend, yet the below percent change for 2009-2010 in manufacturing unit labor costs graph, shows other nations are lowering wages. The great labor arbitrage race to the bottom looks full on.

Why Did the Unemployment Rate Drop When Only 120,000 Jobs Were Added?

The headlines blare unemployment rate lowest since March 2009! Yet November only added 120,000 jobs, barely enough, as usual, to keep up with population growth. So, how could the official unemployment rate drop -0.4 percentage points, from 9.0% to 8.6% in a month?

Let's look at the data.

Some Ridiculous Statistics At A Glance

Welcome to the concentrated boiling up of economic graph-o-rama absurdity and horror in number form. Every week, economic data pours in and some damning statistics go flying by with nary a nod.


Financial Crime Prosecutions

Syracuse University, through their Transactional Records Access Clearinghouse, analyzed Justice department data. They found the number of prosecutions for financial fraud is dramatically down, 28.6%, from just five years ago.

I Like Statistics and So Should You

statistically significantFunny title for an article. Numbers, statistics, stats....those boring people with their spreadsheets, graphs, always showing you up at a party in a game of Trivial pursuit.

Facts! Who needs 'em! Uh, we do. A very obscure thing is happening in Washington D.C. All of those dusty agencies with their legions of geeks and geekettes, cranking through numbers and collecting data are under attack.

Here are some of the statistical and science programs far the BEA has not been cut, but the Census was, by -$6.2 billion. This is before the infamous super Congress was created to cut much more out of the budget.

As a result the Statistical Abstract is about to go bye-bye. People are speaking out trying to save this treasure trove of data. According to this op-ed requesting America save the statistical abstract:

The agency’s 2012 budget would eliminate the Statistical Compendia Branch, which compiles the Stat Abstract and other publications (example: the “County and City Data Book”). The cut: $2.9 million and 24 jobs. Both the book and online versions of the Stat Abstract would vanish. This is a mighty big loss for a mighty small saving.