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Over 5 Million Non-Existent Jobs: How $1.3 Trillion In Student Debt Broke The “Birth/Death Adjustment” Model
zerohedge.com / by Tyler Durden on 10/15/2015 17:53
One of the main reasons why the BLS has been massively overestimating job creation ever since great financial crisis, is due to the well-known birth-death adjustment, aka the CES Net Birth/Death Model, which quantitatively is shown on the chart below, has resulted in the “addition” of some 5.3 million jobs, that don’t actually exist, but are merely modeled by the BLS which continues to assume the same new business creation/destruction dynamics that existed before the crisis.
The is a big problem with this core assumption, which has follow through effects not only for domestic fiscal policy, but also monetary policy (and explains why despite a 5.1% unemployment, there is zero wage growth, thus keeping the Fed pushing the ZIRP accelerator pedal years later), for the simple reason that as of this moment it is dead wrong.
Here is what Gallup CEO, Jim Clifton, wrote several months ago looking at the trends in new business creation and destruction in the US.
The post Over 5 Million Non-Existent Jobs: How $1.3 Trillion In Student Debt Broke The “Birth/Death Adjustment” Model appeared first on Silver For The People.
Source: http://silveristhenew.com/2015/10/15/over-5-million-non-existent-jobs-how-1-3-trillion-in-student-debt-broke-the-birthdeath-adjustment-model/
