shove your green shoots

i may be late in reaching this bit of news, but bear with me. the headlines made a lot out of April's unemployment figures, which seemed to show a sharp slowdown in the contraction of the labor market. this, in turn, prompted every pundit from here to the moon to once again pronounce the second coming of the fast times. i'm afraid to say, gentlemen, that you should slow down your prognosticating: there's a catch in those unemployment figures, and boy, it's a doozy.

the bureau of labor statistics, they who handle the numerical aggregates we wait at the edge of our seats for, did something curious when analyzing the state of the labor market in april. unlike in previous months, it chose to adjust its figure upwards--that is, positively--rather dramatically; the adjustment made was, in fact, to the tune of 226,000 jobs. that's the amount that the BLS thought was created by 'new firm start-ups'. why did they make this assumption? because 227,000 jobs were lost in the same month due to firm closings, and apparently, when a firm closes, the BLS makes the statistical leap-of-faith that a new firm automatically appears to take its place. as sandwichman over at econospeak points out, this kind of jiggering with numbers might make sense during good times, when businesses are born fairly rapidly and the government cannot track their labor market decisions month-to-month, but it's absolutely absurd in this economic climate. the fact that the lay-off numbers for firm deaths and births are nearly exact--only 1,000 jobs apart--stinks to high heaven of political jerrymandering.

it seems pretty clear from this, and from the results of the stress test, that the government's strategy is less the practical application of economic policy and more the steering of popular expectations about the economy's performance. if everyone can be tricked into believing things are alright, then, this particular line of reasoning goes, everything will become alright. people will act as if they aren't in a recession and suddenly we will not be in one. i'm not going to lean too heavily on why that is a truly terrible national strategy. structural weaknesses are structural weaknesses, and cannot simply be wished away. the unadjusted BLS figures show an even stronger historical contraction in the labor market than has thusfar been reported: 815,000 laid-off in february, 813,000 in march, and765,000 in april. the numbers for april are further distorted by the one-time hiring of 62,000 new census bureau employees to conduct the first stages of census 2010. in other words, absolutely nothing has changed; the best that can be said is that our situation hasn't gotten significantly worse.

i'm betting, however, that that might not continue to be the case. with the stock market in an unsustainable mini-rally (since 1930, every major period of economic slowdown has feature several periods of rapid upward movement in the dow, followed by slumps so severe as to bring the index below earlier lows) and the banks fudging their financial health, my spider sense is tingling, warning me of danger. the fundamentals don't look good, no matter how you spin them. it's only too bad that the public is being so severely misinformed, and is, potentially, being encouraged to act in a more profligate way than is reasonable, given the severe reality of its economic position.