Fed admits its numbers are dodgy, very dodgy

>Waller pointed out that initial monthly headline employment numbers for 2021 led him to believe that the job market was “okay, but it’s not really great.” Even though inflation was at a 40-year high, he and other Fed officials were under the impression that they’d need to proceed very carefully with raising interest rates, fearing it could lead to job losses, Waller said.
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>But along came the revisions.
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>For instance, in the [initial jobs report](https://www.cnn.com/2021/09/03/economy/august-jobs-report/index.html) for August 2021, the Bureau of Labor Statistics estimated 235,000 new jobs were added.
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>As is the case with any month’s jobs report, the change in employment is subject to three revisions. The first two come in the next two month’s reports. For August 2021’s headline employment number those first two revisions meant the number of jobs added was closer to 483,000, more than double what the BLS first estimated.
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>The third and final revision comes in the next calendar year from when the initial estimate was released as the BLS reconciles the survey data it collected to arrive at the initial estimates with the actual data it subsequently receives from state labor departments. For August 2021, [that final revision](https://www.cnn.com/2022/02/04/economy/january-jobs-report/index.html) brought the monthly change in employment up to 663,000, a 428,000 increase from the very first estimate.

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>The rate at which people are getting recruited for surveys that are used in many of BLS’ monthly reports including employment, Consumer Price Index and Job Openings and Labor Turnover are down sharply from before the pandemic.
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>That makes it more likely that the survey sample could be more biased, said Erica Groshen, a former commissioner of the BLS. The agency, she said, “tests for all the biases they know about, but there’s more bias that could creep in the fewer people respond.”
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>“You do have to be concerned that the employers who were never agreeing to participate in the survey in the first place are somehow characteristically different from the ones who do agree,” said David Wilcox, a longtime Fed staff member who is now an economist at the Peterson Institute for International Economics and Bloomberg Economics.
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>For instance, it could be that firms that agree to participate in the BLS’ survey are more financially stable than ones that decline, he said.
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>“That suggests that there’s the potential possibility that we may be mismeasuring what’s going on in the economy,” he said, adding though that it would mainly apply to the preliminary estimates and not the final one.
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>The declines in recruitment rates, which help explain declining response rates, aren’t causing larger revisions between initial and final employment estimates, Laura Kelter, national estimates branch chief within the division of Current Employment Statistics at the BLS, told CNN. “However, we continue to monitor the issue,” she said.

[https://www.cnn.com/2024/01/31/economy/data-revisions-fed-rate-changes/index.html](https://www.cnn.com/2024/01/31/economy/data-revisions-fed-rate-changes/index.html)

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Which all goes to prove my point that economic decisions are always based upon guesswork, because there is no practical way to verify any of the numbers economists use. Some here assert that economics is actually a science, and that economic theories and suppositions are based on solid facts, neither of which are true. Economics is far more closely related to and rooted in social philosophy. Most economists seek to justify wealth concentration and the exploitation of the masses through the use of arcane formulae that show how that exploitation is a good and necessary thing. The “law of supply and demand”, for instance, isn’t a natural law of any sort. Rather it is a justification to exploit shortages for private benefit, ignoring most often that very frequently those shortages were deliberately created.

Executives are highly paid to manage supply chains, yet were caught out by the pandemic, which resulted in shortages that they conveniently exploited to raise prices and generate record profits. Their failure to prevent supply chain disruptions should have exploded the myth of their competence to run things efficiently. Instead, it exposed them as exploitative grifters who took advantage of the world.

I would have no problem with economics or its practitioners if they would just admit honestly that science has very little to do with what they do. They are social philosophers who seek to impose a particular view upon the economy based on their political and social leanings. They use numbers to justify their positions the same as astrologers use numbers to justify their prognostications. In both cases, the numbers aren’t science, but are used to give the illusion of science tp lend credibility to what are essentially opinions.

by Tliish