From JACK RASMUS:
On Friday, August 5, the employment numbers were released by the US Department of Labor for July jobs. The Current Establishment Survey (CES), referred to as the payroll report, indicated 117,000 jobs were created in July. That was more than the general forecast of 85,000 by economists, although still well below the 150,000 a month needed to absorb new entrants into the labor force. However, it was nonetheless heralded by the business press and politicians as not so bad, considering that earlier in the week reports for manufacturing activity and consumer spending were disastrous–indicating the worst performances in two years for those indicators since the economy’s 2009 lows.
But hold on. The 117,000 represent just one part of the Labor Departments monthly reporting of employment, what are called the B tables. Those tables reflect a reporting by establishments (businesses) to the Labor Department each month. The problem with the payroll report (CES) is that it is acknowledged to be biased toward larger establishments. Bigger corporations, with more than 500 employees. Many smaller to medium businesses are not included in the CES report and B tables. Nor are most of the millions of non-incorporated proprietorships; or the nearly ten million self-employed. The latter three groups are reflected in the Labor Departments A tables, in a second survey on jobs each month called the Current Population Survey, or CPS.
The CPS reflects best the job hiring and layoffs by small and medium sized businesses. Small business is generally acknowledged as responsible for more than half of all jobs created over the past decade. For job losses as well. And small business has been steadily reducing jobs this year and, furthermore, continues planning to do so in the second half of 2011, according to various business surveys…
The real crisis is not deficits or debt, but the crisis of job creation that is the number one reason for the chronic and growing deficits of the past two years.
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