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Analytics point to overstated job growth in official employment data – was it deliberate?
Sam Adelton
May 24, 2007
Analytical models are trying to understand some of the discrepancies in the official employment data. It seems the job growth has been knowingly or unknowingly overstated. Take the example of the homebuilders. Housing starts are down close to 39% from the peak last year. But residential construction unemployment is up by only 5%. That does not maker sense. In that industry, no one is paid to sit on the sideline.
Some argue, the builders used illegal aliens to do the work. Now these illegal aliens are laid off. They never really showed up on the statistics. That fact is that the numbers do not match up.
Same kind of statistics points to discrepancy in financial services industry. The financial services sector is down 15% from the peak last year due to real estate related problems. But the unemployment in financial services sector have hardly budged.
It is possible that underemployment in the economy has created a massive flaw in the way job growth is calculated. For example, the unemployment rate is low because many of those lost their jobs started their own business because of lack of comparable opportunities.
There is plenty of hamburger flipping jobs but there is a lack of professional well paying jobs.
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