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EIB WEB PAGE DISGRONIFIER

State-Run Media Spins and Buries: Jobless Claims Rise, Retail Sales Weak

BEGIN TRANSCRIPT

RUSH: I don't know that you've seen any of this in the Drive-By Media.  I don't know on television if you've seen it.  Have you seen it, Snerdley?  Have you seen any reports on the unemployment news?  Well, it's amazing here.  "The number of Americans applying for first-time jobless benefits rose last week, the Labor Department reported on Thursday, reversing a recent decline and suggesting the labor market remained brittle. ... Initial claims for unemployment benefits rose to 399,000 in the first week of 2012, the highest in six weeks, from an upwardly revised 375,000 a week earlier. The four-week average of claims was also higher, rising to 381,750 from 374,000."

And if you read the story further, you find out that it was seasonal hiring -- seasonal hiring -- that accounted for the latest generation of the economy to turn the corner, the seasonal hiring in November and December that gave us all that wonderful unemployment news.  And the media never bothered to tell us.  I did.  But the media never bothered to tell us it was seasonal employment taking place.  Somebody got fired.  Somebody got fired and it wasn't Romney.  You know, Romney didn't fire 'em.  He'd like to, but he didn't.  So, yeah, the Christmas season to boot.  So Obama won the future for about a month, except the fact is Obama didn't win anything, because don't forget the polling data.  By two-to-one, people were asked -- we had this earlier this week -- by two-to-one people were asked what's the greatest fear you have going into 2012.  By two-to-one people said Obama's reelection.  Somehow we gotta get that news to the Republican Party. 

So now we gotta get that news to the leadership of the House and the Senate, to the Republican National Committee.  They're the ones that don't think Obama can lose. They're the ones that don't think Obama can be beat.  The American people are telling them every day, "We don't want any more of Obama. We don't want Obamacare to be enacted. We don't want all this spending. We don't want all this debt, and we don't want a president who doesn't like the country."  But our side doesn't want to admit what we're dealing with.  "That's just the normal, natural ebb and flow of politics, Rush. The Democrats are gonna win some, and we're gonna win some, and what we really want to do is get ourselves back in charge of the money," which their objective happens to be. 

And also about the unemployment number, note that miraculously, I'm looking here at Christopher Rugaber who is the official unemployment reporter at the AP: 399,000.  Notice how often the initial new claims number hits 399,000, just under the dreaded 400,000 job cutoff.  And you can bet on the fact that this 399,000 number is going to be quietly revised upwards, and it will not be reported on.  (interruption)  Well, Snerdley is asking me if the unemployment rate will go up.  No.  My guess is the unemployment rate will not go up.  What's gonna happen is that the universe of jobs will continue to shrink.  The total number of jobs available will be reported to have shrunk.  "Shrinked," for you in Rio Linda.  In fact, unemployment may even fall.  That's what's been going on.  As unemployment claims go up, the unemployment rate has been falling, miraculously so. 

So what are we now, at 8.5%?  We're gonna be in the high sevens by the time we get to November.  You watch.  Look, if Obama can make a recess appointment while we're not in a recess, what's jigging a few numbers at the Department of Labor?  Also, "Retail Sales Rose at the Weakest Pace in Seven Months in December."  It was not big.  We thought it soared.  They told us it soared at the time.  And this is, of course, what people remember.  But the truth of the matter is this would be a negative number of 0.2% down if it weren't for automobiles.  If it weren't for automobile sales, the whole retail sales number would be a loss of 0.2%. 

"Retail Sales Post Gain of 0.1% as Holiday Buying Fades -- Retail sales rose at the weakest pace in seven months in December as consumers pulled back late in the holiday shopping season, cutting purchases at department stores and spending less on electronic gadgets." We were not told that. During the month of December we were told the exact opposite.  I haven't seen those reports.  I've only seen this report. (interruption) What do you mean you've seen reports that retail sales are soaring?  AP report?  In your stack?  At the top of your stack, "Retail sales barely rose in December, but the gain was enough to push sales to a record level --" is that what you're talking about? 

Okay, well, sorry, the CNBC report does not take the "record" line that AP reports. Snerdley's story is AP. "Retail sales barely rose, but the gain was enough to push sales to a record level for 2011." Wait a minute! "A record level for 2011" was nothing to write home about in 2011. Think about that. To put this in perspective, a one-tenth of one percentage point increase equals a record for the whole year is the way to look at this. One-tenth of one percent increase in retail sales! "The gain was enough to push sales to a record level for 2011. It was the largest annual increase in more than a decade." That's not good news. (laughing) It's 0.1%. Now, I think to put this in perspective, "The week's unemployment applications with seasonal adjustments is disappointing.

"Without seasonal adjustments..." and this is the real number. "Seasonal adjustments" are just wild guesses based on what they think is gonna happen because it's Christmas. "The seasonally adjusted number is 399,000 unemployment claims this week, up from last week's 375,000." That's 399, right? It's just magically below 400,000. In the real world, however, "Without seasonal adjustments, the initial claims were 642,381," in one week. That's the unadjusted number -- and the "seasonal adjustment," again, is just a wild guess based on historical data and expectations given the time of year (in this case, the holiday season).

BREAK TRANSCRIPT

RUSH: Ron in Enon Valley, Pennsylvania, great to have you on the EIB Network.  Hello, sir.

CALLER:  Thank you very much, great to be with you as well.  I know that you want to educate your audience and I know it's a very important part of it, and I hate to be the bearer of maybe slightly bad news, and that is your comment about seasonal adjustment being just a guess.  It's a little off, and I was compelled to call you simply to correct you.

RUSH:  Before you correct me, the reason that I made the statement is because the actual unemployment number, the actual number of initial claims in the report period, is 642,000 seasonally adjusted to 399,000.

CALLER:  Correct.

RUSH:  Now, that's a huge gap.

CALLER:  It is.  But once you understand what that actually is, you'll know why it is that they do that.  I know that there's an awful lot of other manipulations.  They've redefined unemployment over the years to protect themselves.  I'm not trying to defend what they're currently doing with unemployment.  In fact, I think it's ridiculous, and it's intended to keep the people in power, in power.  But seasonal adjustment is a statistical technique that allows you to compare numbers across weeks or months over an entire year because what you can do -- and this stuff is not just pulled out of a hat someplace.  You actually run it through econometric models and you statistically test whether or not it's a consistent thing, if it's long term, if it's changing.  So it adjusts itself as you do the modeling statistical analysis and you keep it to a very high level confidence interval well above 99%, so these adjustments just allow you to use these numbers across time --

RUSH:  Okay, do this for me.  Help me learn.  Tell me exactly what seasonally adjusted means, and if you can --

CALLER:  Sure.

RUSH:  I've got about a minute here.  Tell me how you get from 642,000 to 399,000?

CALLER:  Yeah, what happens is that every month of the year or every week within the year, because of holidays and because of weather and because of schools and because of a lot of jobs that are seasonal, people that are roofers and people that are, you know, Santa Clauses at Christmas, every year you're gonna have people hired and laid off because of these seasonal factors.

RUSH:  Right.

CALLER:  And so what they do is they use the equations, the models, the statistics to look at these things and say which portion of the employment or unemployment in this month is not due to the seasonality of what happens every year and what portion of it is actually -- we'll take out the seasonality and we'll look at all these numbers --

RUSH:  Okay, okay.

CALLER:  So it makes it comparable.

RUSH:  I got you.  So basically the difference, 642,000, 399,000, is those jobs were temporary, they're not permanent, you shouldn't count them anyway either way, up or down, because they don't matter?

CALLER:  Correct, and next month you'll find another seasonal adjustment which will probably be the opposite adjustment.

RUSH:  Well, it should be, but with this bunch you don't know.  Look at how they're messing around with the whole job universe number just to get their unemployment rate down.  Anyway, thanks for the call, Ron.  I appreciate it.

BREAK TRANSCRIPT

RUSH:  Our last caller, obviously a statistician, he was very concerned with the integrity of his profession. That's why he's upset with me saying the numbers are made up.  Just to clarify, folks, my focus on this always is with the media and how they choose to report this stuff, and there is no doubt in my mind, there's no way they're gonna use the number 642,000 if they can avoid it and they're gonna portray the 399,000 as real and they're gonna underplay the seasonally adjusted business.  It's all part of the scam that's part of this regime, to play games with this unemployment number. 

END TRANSCRIPT

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