Trumka Willing To 'Accept The Consequences' Of Holding The Line On Ending Wealthy Tax Rates

Right after the election, the Obama administration’s Bureau of Labor Statistics proudly trumpeted that the economy had added 151,000 new jobs in October. President Obama, about to head off to India, land, where many American jobs have moved for good, made it sound like maybe the American economy had finally turned a corner. The news led to a jump in the stock market and everyone breathed a sigh of relief, because finally, we had a number that was greater than the 100,000 new jobs that we have been repeatedly told are needed “just to keep pace with the new workers who join the labor force every month.”

Only the number is a fraud. It turns out that this job number is a fictional construct created by BLS statisticians who are using outdated estimates for the number of new small businesses supposedly created every month, and also outdated estimates for the number of small businesses that go bankrupt every month. The reality is that in this deep recession, few new businesses are being started. No surprise there. It takes capital to start a business, and banks aren’t lending these days, especially to risky new start-ups. The reality too is that existing small businesses are folding at a high rate. The pace of bankruptcies of small companies is down from the record 2009 level, but is still extremely high by historical standards.

The real story on employment is told by the BLS’s household survey, which is taken every month and looks at 60,000 randomly selected households. That survey shows that far from the US economy adding jobs, 330,000 jobs were lost in October.

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