103,000 of [the new jobs], before seasonal adjustment — were added by the statisticians, not reported by employers

November 2, 2007, 11:12 am | Making Up Jobs

Today’s employment report is mediocre at best. But to understand that, you have to look past the headline numbers.

Those numbers say that the government’s survey of employers showed a gain of 130,000 private sector jobs, on a seasonally adjusted basis, in October. That seems to be better than in recent months.

I don’t believe it. Most of those jobs — 103,000 of them, before seasonal adjustment — were added by the statisticians, not reported by employers. (It should be noted that, before seasonal adjustment, there were 201,000 jobs added, so this is just more than half.)

Why add jobs? It is an effort to include jobs created by new companies not surveyed, less an estimate for jobs lost at companies that went out of business and therefore did not respond to the survey.

Of those 103,000 jobs, 14,000 were in the construction industry, and 25,000 were in finance. Does anyone believe that all those new companies are being created in those industries now? (You can see the government’s explanation for this here.) ...