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John Crudele: I've got a hot tip for the financial press

Section: Daily Dispatches

By John Crudele
New York Post
Wednesday, June 6, 2007

Attention: Wall Street Journal, New York Times, and Barron's.
The Labor Department over-estimated job growth again.

Last Friday the department reported that 157,000 new jobs were created in May.

That was considerably higher than the 140,000 that the "experts" had been expecting.

But in order to get that kind of astounding growth in an economy that seems to barely be expanding, the Labor Department had to assume that 203,000 jobs were created by companies that couldn't be counted.

This is part of the so-called birth/death calculation made for companies the government thinks (but can't prove) are being newly formed.

In other words, the department made a guesstimate.

You do the math: Subtract those 203,000 make-believe jobs from the 157,000 total and you get a loss (not a gain) of 46,000.

Last week the Journal, Barron's, and the Times were scratching their heads over why job growth seemed to be exaggerated. Now they know why.

Making these fake job totals even more preposterous is the fact that the government included growth of 40,000 jobs in the construction industry even though housing is in its greatest slump in decades.

Also included were 75,000 new make believe jobs that the government guesses exist in hospitality and leisure.

And then there's the over-statement of the nation's gross domestic product.

The Commerce Department last week said economic growth slowed to an annualized rate of 0.6 percent in the first quarter, down from initial reports of 1.3 percent.

In case you don't understand how this works, the word "annualized" means you have to divide the 0.6 percent by four in order to get the true growth for the quarter -- which would be a minuscule 0.15 percent.

And if you give a proper accounting for inflation -- which the government doesn't -- the economy would have declined.

More on that in a later column.

* * *

I still haven't heard from Hank Paulson or his Treasury Department on the Post's request for information on the President's Working Group on Financial Markets, aka the Plunge Protection Team.

But just so Paulson knows we haven't forgotten about him, we lobbed a new Freedom of Information Act request at him last week. (Hank, it should be in today's mail.)

This time we requested "copies of any internal departmental documents produced by the Department of Treasury in response to my two earlier FOIA requests."

I have a clever lawyer. He told me to ask for e-mails related to why the Treasury is stonewalling us despite saying in internal documents that the requests would be honored ASAP.

"We continue to despair at the department's delay in responding to the two earlier FOIA applications," our latest letter says.

My birthday has come and gone, so that can't be what Treasury was waiting for. Maybe Christmas?. ...

* * *

at the
World Gold, PGM, and Diamond Investment Conference
in Vancouver, British Columbia, Canada
Sunday and Monday, June 17 and 18, 2007

* * *

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