Don't Look Behind the Employment Curtain - Rodney Johnson/HSDent (11/21/11)

As I have discussed too many times, the Bureau of Labor Statistics (BLS) continues to fudge the jobs numbers by including the Birth/Death Adjustment, which is a measure of how many jobs are added to or taken away from the economy by small companies either starting up (births) or shutting down (deaths). Amazingly, the BLS almost always assumes that this is a positive number, so that miraculously there are lots of new jobs created by small businesses…even when there isn’t.

Every March the BLS reconciles their monthly Birth/Death Adjustment assumptions, coming clean with how far off their numbers have been for the previous year. One of the main drivers of the reconciliation is the measure of jobs created by businesses that have been open less than one year. Over the past four years, this is how the numbers look –

While the last measure is ever so slightly positive (about 55,000), does it make sense that this number has jumped ten-fold? So far in 2011 the BLS estimates that the Birth/Death Adjustment has added about 540,000 new jobs to our economy. In March of 2012, we’ll get the big reconciliation. Don’t hold your breath for something positive.