The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Nikole Wollerstein who wrote (90153)	9/24/2007 1:10:27 AM
From: RJA_	Read Replies (1) of 306849

>>Unemployment 4% See shadowstats.com nunbers slightly massaged. Ever hear of the birth death model? See here, Chart 6: financialsense.com While on the subject of employment indicators, we would like to discuss one that seems unreliable to us – nonfarm payrolls. The principal reason we find it unreliable is the so-called birth/death adjustment the bean counters at the Bureau of Labor Statistics (BLS) make each month. The birth/death adjustment is an attempt to account for the net new jobs created by businesses not yet reporting to the BLS. As Chart 5 shows, in the 12 months ended August 2007, there had been a net increase in nonfarm payrolls, including the birth/death adjustment, of 1.521 million. But when the birth/death adjustment was excluded, the net increase in nonfarm payrolls was only 407,000. Another way to look at this is to calculate the birth/death adjustment’s percentage contribution to the 12-month change in total nonfarm payrolls. Chart 6 shows that in the 12 months ended August 2007 the birth/death adjustment represent 73% of the increase in nonfarm payrolls compared to only 31% in March 2006. Enquiring minds want to know why the birth/death adjustment’s contribution has more than doubled since March 2006. With small businesses expressing reservations about expanding their operations (see Chart 7), is it reasonable to expect that there has been a sharp increase in business start-ups whose hiring is not being captured in the BLS’s sample of establishments? Ever check stock market prices against, say Gold? Hows your increase then? IE -- Stocks have increased, against fiat money... the supply of which has been increasing 14 - 15% per annum lately (M3). Inflation, I suppose you believe its 2%. Bought food or gas lately? Remember "deficits don't matter". Just the kind of folks I like running my currency...

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