Labor Department Provides Obama `October Surprise' Employment Figures
October 6, 2012 • 2:40PM

The Labor Department, from Secretary Hilda Solis down to several staff economists, spent the day denying the obvious: It had used huge "seasonal adjustments" and "annual revisions" to deliver to NerObama exactly the employment reports his Chicago campaign wanted most. And Solis's department had done this twice in one week.

The BLS has announced two major reports within a week which look "ordered in Chicago." The first was an "Annual Revision" last Friday, Sept. 28, which retroactively increased the number of "jobs created" from April 2011-March 2012 so as to put Obama just barely into employment-positive territory for his entire term; his campaign badly needed to take away the stigma of Obama being a "job-losing president". The second was Friday's September employment report, moving the official unemployment rate below 8%; something the Chicago gang wanted even more badly.

Both issues by the Bureau of Labor Statistics (BLS) were based on impenetrable seasonal and statistical adjustments, of the type which often make its reports unreliable-to-useless for real economic analysis. But this week they appeared politically chosen adjustments, drawing charges from many quarters and heated denials from Solis and various Obamatrons.

"Unbelievable jobs numbers," commented former GE CEO Jack Welsh as soon as the September employment report appeared with its big drop in the official unemployment rate to 7.8%. "These Chicago guys will do anything; can't debate, so change numbers." CNBC-TV bond market reporter Rick Santelli pointed out that he had predicted on the air one month ago, that "Somehow, they will get the rate down to 7.9% in September's report." Santelli was referring to the BLS's amazing feat of now having lowered its official unemployment rate by a full half-percent in two hot election months — from 8.3% in July to 7.8% in September — despite the reported "job creation" being a low 250,000 for August and September combined. In a telling sign, the BLS, which usually headlines its monthly release with the jobs increase (or decrease) number, this month headlined the drop in the rate.

The report appeared to have two "historic firsts" for Obama. While the BLS Establishment Survey (of employers) claimed job growth of just 114,000, the Household Survey claimed 873,000 — eight times as many newly employed Americans. This ninefold difference is unprecedented in either direction, up or down. Further, the report claimed a huge, nearly 600,000-employee boom in (part-time) employment of 18-24 year olds, the first such increase in any September since the BLS was created in 1948!

While Solis fumed that she was "insulted" by the suggestion of manipulation, BLS deployed one of its senior economists, Steven Haugen, to the media, to insist that it did not fake the September report. Haugen said only that "the Household Survey is small and very volatile."

There are indications that the BLS plugged into the Household Survey a statistical assumption of a very large seasonal drop in the labor force (centered on 18-24 year olds) in September. The survey then supposedly found that this did not occur. This made its "seasonally adjusted" total for the labor force jump up by half a million in a month; and its adjustment of the raw results of the small Household Survey jumped up accordingly.

In fact, the one-month "job creation" of 873,000 claimed in the Household Survey, is greater than the unadjusted total "job creation" for the past 10 months combined in the Establishment Survey, which is 650,000. Labor force participation remains at 30-year low. Maybe Susan Rice will defend this one, too.