Who will answer?

August 31 – September 6, 2024

Big news. This week it is a continuation of the main news from two weeks ago: https://fondmx.pro/en/weekly-wrap/what-it-takes-to-have-a-house-make-from-paper-now-it-s-ours/ . But if then the Bureau of Labor Statistics of the US Department of Labor admitted that it was engaged in falsification of statistics (well, let’s call it carefully, errors), now this problem has moved into the political plane. A number of US senators have appealed to the Department of Justice with a request to figure out how this became possible at the systemic level.

The entire text is in the final section of the Review.

The key problem here is not labor statistics (although new distortions were discovered last week), but inflation statistics. As we already noted in the review two weeks ago, information about this appeared at about the same time as information about labor statistics, but it has not yet been legalized. But if it is legalized, then it is necessary to revise the GDP indicators from 2021 and they will show that since the fall of this year, an economic downturn has begun in the United States and continues to this day.

This will be a total disaster for the leadership of the monetary authorities and the entire liberal economic school. And there are no others in the US now. And, of course, this is an extremely dangerous situation from the point of view of not only the financial and economic, but also the political stability of the American state.

Macroeconomics. Labor productivity in Canada is at its lowest since the end of 2017:

German industrial production -5.3% y/y, 14th consecutive monthly decline:

In fact, the results of the latest state elections are precisely the result of this degassing process.

The official PMI (expert index of the state of the industry; its value below 50 means stagnation and decline) of Chinese industry is 49.1, an 8-month low:

The indicator for all industries (50.1) is the worst in 8 years of data collection (excluding the Covid-related failures):

Independent researchers are less pessimistic, but even there the industry is only showing a mini-growth from the 10-month low:

And in all industries as a whole, the same bottom is repeated:

Indonesia’s manufacturing PMI (48.9) is the weakest in 3 years, and the weakest without Covid in 5 years:

The same picture in South Africa (43.6):

And in Mexico:

France hits 7-month low, new orders fall at worst pace since Covid (May 2020):

And here’s the question: wasn’t the “Durov case” staged to distract attention from the acceleration of the decline?

In the US, a 14-month low:

Australia’s current account deficit is at its highest in 6 years:

US trade deficit worst in 2 years:

New car registrations in Germany are down -27.8% per year; not counting Covid, it was worse in 2018, and earlier – in 2010. For electric vehicles, the decline is more than threefold (-68.8% per year):

The same in France (-24.3%), where it’s been the bottom since 2000 (excluding the Covid-related dips):

Australia’s job postings have been declining month-on-month for 7 months in a row:

The number of job vacancies in the US has recouped the entire Covid surge and returned to the peaks of 2018:

US job announcements in August are the highest for this month since 2009 (not counting 2020):

US private sector job gains (ADP survey) are the lowest since January 2021:

US broad unemployment rate U6 hits 6-year high (excluding Covid) 7.9%:

True, the length of the workweek in the US in August rebounded from the lows of the year:

In Canada, the 7-year peak unemployment rate (again, excluding the Covid spikes) is 6.6%:

The Bank of Canada cut its rate for the third time in a row – by 0.25% to 4.25%.

Main conclusions. Just as at the end of 2021 and the beginning of 2022 we noted inflation records in the global economy every week, now we are seeing records in the decline of industry and problems in the labor market. Which, in fact, is characterized by the saying “The nose is stuck out – the tail is stuck.”

Now the promised text of the senators’ letter:

«August 27, 2024

Given the numerous downward jobs revisions published by the Bureau of Labor Statistics (BLS) over the last two years, we are seeking information regarding the BLS’s methodology in estimating job numbers in addition to why the BLS has failed to accurately assess changes in labor participation. For example, in recent months, the American people have witnessed a monthly 97,000 downward revision for January 2024,  a 300,000 total downward revision as part of the BLS’s annual 2023 benchmark review,  and, most recently, an 818,000 total downward revision for jobs created in the 12-month period through March 2024.  This revision to the 2024 benchmark review is 28 percent lower than the original BLS estimate of 2.9 million jobs created,  the second worst revision in U.S. history, and one of many data points accentuating the harm that Bidenomics has brought to the American people.   

These discrepancies, representing jobs that the Biden-Harris Administration claimed to have created, which simply do not exist, were reported as signs of economic dynamism and positive job creation. There were multiple instances over the last year in which news outlets reported that the job market was “strong,”  “red-hot,”  or “sizzling,”  to name a few. News outlets took initial BLS data at face value, concluding that the job market was strong.  

Additionally, Chair Jerome Powell and the Federal Reserve have long claimed to be “data dependent”  in their decisions to set monetary policy, and monthly jobs numbers undoubtedly factor into interest rate decisions. Yet, with such consistent downward revisions, BLS data and actual job market growth clearly failed to match up with the rosy estimates painted by the Biden-Harris Administration. 

These misleading numbers create a false impression for the public and cast doubt on the validity of the Bureau’s accuracy and legitimacy. Had news reporters and outlets received the revised job numbers first each month, reporting and public perception of the job market may have changed. Given the woeful record of the Bureau over the last two years, it is time for the BLS to accurately assess labor participation at the outset and admit the fact that the number of full-time employed Americans decreased by 510,000 from July 2023 to July 2024. 

As we approach the presidential election in 70 days, the state of the economy is one of the major issues on American’s minds.  There should be no confusion when it comes to evaluating the health of our economy. Regularly publishing rosy job estimates that do not represent reality is blatantly dishonest and misleads the American people, contributing to the fact that less than 25 percent of Americans trust their government to do what is right most of the time.  The Biden-Harris Administration’s policies have crippled the American working class. Instead of honestly reporting the record, these preliminary job numbers represent the Administration’s desire to claim economic success when Americans are struggling to afford basic necessities.  

To that end, we demand that you provide answers in writing to the following questions:  

1. Why has BLS repeatedly revised downward its monthly job estimates over the last two years?
2. Why has BLS repeatedly revised downward its annual benchmark revision for each of the last two years?
3. Of the jobs created under the Biden-Harris Administration, how many were simply recouped from the COVID-19 pandemic job losses?
4. Of new jobs added that were not recouped from the COVID-19 pandemic, what percentage were full-time jobs versus part-time jobs?
5. Of new jobs added that were not recouped from the COVID-19 pandemic, what percentage are jobs within the federal government?
6. What percentage of new jobs in 2024 have been full-time rather than part-time?
7. What percentage of the revised job numbers are going to foreign workers?
8. What in the BLS’s methodology is malfunctioning so badly that it must revise its job numbers downward by almost a million jobs?
9. Are there any protections in place guarding these important statistics against influence from presidential administrations that have an interest in having their BLS report favorable job outcomes?

In November, the American people will have a choice to continue the failed policies of the Biden-Harris Administration or pursue a pro-worker agenda which will not need to be revised down to show how bad conditions have truly become. We request a response to this letter by September 9, 2024. It is imperative that the American people receive a fair and accurate accounting of the nation’s economic health. 

Sincerely,

Roger Marshall, M.D. United States Senator

Rick Scott United States Senator

Marquain Mullin United States SenatorCC:

Erica McEntarfer, BLS Commissioner

William J. Wiatrowski, BLS Deputy Commissioner

Ted Budd United States Senator

Marsha Blackburn, U.S. Senator»

This looks like an ultimatum, especially in the context of an election campaign. And, again, imagine what a corresponding letter devoted to the issues of distorting inflation statistics would look like?

In conclusion, we will provide a schedule of daily payments for servicing the US national debt:

As we can see, steady and almost uniform growth has begun since the beginning of 2022, and allowing it to continue is clearly becoming dangerous. Perhaps this will become an additional fact that will push the Fed to begin a rapid rate cut. The trouble is that this will inevitably cause a sharp increase in inflation. There is only one question: will this increase in inflation manifest itself before the elections or not?

Well, we wish our readers a calm exit from the summer relaxation and a successful entry into the upcoming business season!