The gains in the job market in May were impressive.
But there’s something I need to point out. May is one of those months for which the Labor Department makes a guess that a large number of jobs were created by companies so new that they couldn’t be reached by Labor Department surveys.
The government doesn’t really know that these companies, or the jobs they supposedly created, actually exist. It just thinks they do.
This kind of guesswork has been going on for decades, so don’t accuse the Trump administration of manipulating the numbers — they have always been manipulated.
For instance, those 223,000 seasonally adjusted jobs that Washington said were created in May included a guess that these “newly born” companies added 215,000 jobs on a basis that’s not seasonally adjusted.
You can’t just subtract 215,000 from 223,000 to come up with a number of jobs that the government actually knows were created because the first figure is seasonally adjusted and the second is not. And the Labor Department could never tell me what the 215,000 guesstimated jobs would be if adjusted for the seasons in the same way as the other number.
So all we really know is that the guesstimate made the May figure look better than it would have been without the guesstimate.
Two other things:
- There was an even bigger guesstimate used during April (plus 260,000) and that didn’t keep that month’s number from coming in at a very disappointing level.
- In June, the guesstimate will be less than half what it was in April and May. And that could make the job growth reported by the government less than stellar.
