August 11, 2016, 05:23 pm
Obama lied, real wages died
Getty Images
That is the difference between the 4.2 percent real hourly wage increase that the Obama administration's Bureau of Labor Statistics (BLS) claimed American workers enjoyed at the end of the first quarter of 2016, and the revised reality of a 0.4 percent drop in wages reported for that same period in the report released in August, as Breitbart noted.
It is almost as if 1960s television sitcom spy Maxwell Smart is the commissioner of the statistically challenged BLS in this "missed it by thaaat much" report.
The incredible part of this complete reversal of the real wage data from the Labor Department is that millions of dollars are bet on stock and currency markets based upon the expectations of what a large increase in real wages would mean in the retail and other sectors of our nation's economy, and the bureau's miss most likely cost investors millions of dollars.
Can those investors recover their losses because of an economic boom that never materialized because the expectation was built on reporting errors beyond any imaginable margin of error? No, they can't, but no investors worth their salt should trust anything coming out of this government agency that can't shoot straight until its management changes and its processes are thoroughly reviewed.
What's more, President Obama used this absolutely wrong data in his economic speech in Elkhart, Indiana, where he claimed, "Now, here's the good news: Wages are actually growing at a rate of about 3 percent so far this year. That's the good news. Working Americans are finally getting a little bigger piece of the pie."
Obama repeated the higher wage theme while not directly mentioning the fake real wage increase to millions of Americans at the Democratic National Convention, falsely portraying an economy where American workers are beginning to thrive, instead of one where the real wages have actually dropped by 2 percent in the first half of his final year in office. Hard to take a victory lap touting a thriving economy when the average paycheck has been cut by two cents on the dollar in real terms in just six months (a decrease which almost wipes out the entire gain in real wages from 2015.) Yet, due to BLS bad report, that victory lap is exactly what Obama and Democratic nominee Hillary Clinton have been allowed to take, even as the gross domestic product growth numbers have been stagnant at best.
And the heavily worker-focused Donald Trump campaign and other Republicans in the primary were denied the opportunity to talk about the real wage situation in America earlier this year — because BLS either lied or was so far off-base — and in either case, the commissioner should be fired for either corruption or incompetence.
The art of politics is creating and reinforcing perceptions, and the Obama-Clinton economic story doesn't want to focus on what is the worse recovery since the Great Depression. Instead, they want to talk about job creation and workers making more money.
The bureau's false claim that real wages are accelerating rather than the actual decline that has just been revealed in an almost sidebar note in their latest report harmed investors, the economy and skewed the political process, and BLS Commissioner Erica Groshen should be held accountable just as CEOs of corporations are often fired when their actual results fall dramatically short of those they projected publicly.
The Department of Labor's BLS has one job: compile economic data and report it accurately. The agency failed spectacularly with the real wage report, and that failure cannot just be shrugged away.
Obama lied, real wages died.
Manning is the president of Americans for Limited Government.
Getty Images
That is the difference between the 4.2 percent real hourly wage increase that the Obama administration's Bureau of Labor Statistics (BLS) claimed American workers enjoyed at the end of the first quarter of 2016, and the revised reality of a 0.4 percent drop in wages reported for that same period in the report released in August, as Breitbart noted.
It is almost as if 1960s television sitcom spy Maxwell Smart is the commissioner of the statistically challenged BLS in this "missed it by thaaat much" report.
Can those investors recover their losses because of an economic boom that never materialized because the expectation was built on reporting errors beyond any imaginable margin of error? No, they can't, but no investors worth their salt should trust anything coming out of this government agency that can't shoot straight until its management changes and its processes are thoroughly reviewed.
What's more, President Obama used this absolutely wrong data in his economic speech in Elkhart, Indiana, where he claimed, "Now, here's the good news: Wages are actually growing at a rate of about 3 percent so far this year. That's the good news. Working Americans are finally getting a little bigger piece of the pie."
Obama repeated the higher wage theme while not directly mentioning the fake real wage increase to millions of Americans at the Democratic National Convention, falsely portraying an economy where American workers are beginning to thrive, instead of one where the real wages have actually dropped by 2 percent in the first half of his final year in office. Hard to take a victory lap touting a thriving economy when the average paycheck has been cut by two cents on the dollar in real terms in just six months (a decrease which almost wipes out the entire gain in real wages from 2015.) Yet, due to BLS bad report, that victory lap is exactly what Obama and Democratic nominee Hillary Clinton have been allowed to take, even as the gross domestic product growth numbers have been stagnant at best.
And the heavily worker-focused Donald Trump campaign and other Republicans in the primary were denied the opportunity to talk about the real wage situation in America earlier this year — because BLS either lied or was so far off-base — and in either case, the commissioner should be fired for either corruption or incompetence.
The art of politics is creating and reinforcing perceptions, and the Obama-Clinton economic story doesn't want to focus on what is the worse recovery since the Great Depression. Instead, they want to talk about job creation and workers making more money.
The bureau's false claim that real wages are accelerating rather than the actual decline that has just been revealed in an almost sidebar note in their latest report harmed investors, the economy and skewed the political process, and BLS Commissioner Erica Groshen should be held accountable just as CEOs of corporations are often fired when their actual results fall dramatically short of those they projected publicly.
The Department of Labor's BLS has one job: compile economic data and report it accurately. The agency failed spectacularly with the real wage report, and that failure cannot just be shrugged away.
Obama lied, real wages died.
Manning is the president of Americans for Limited Government.
BLS Just "Revised" Away Obama's "Fastest" Wage Growth Since The Crisis
Back February 2016, Obama took to the stage at a press conference to boast about job growth and "most importantly" how the stronger job market was "finally starting to translate into bigger paychecks." He also took the opportunity to jab at Republicans saying the strong jobs data was "inconvenient for Republican stump speeches" as they continued their "doom and despair tour." Obama's specific comments were:
Most importantly, this progress is finally starting to translate into bigger paychecks. Over the past six months, wages have grown at their fastest rate since the crisis. And the policies that I’ll push this year are designed to give workers even more leverage to earn raises and promotions.So, as I said at my State of the Union address, the United States of America, right now, has thestrongest, most durable economy in the world. I know that’s still inconvenient for Republican stump speeches as their doom and despair tour plays in New Hampshire. I guess you cannot please everybody.
The comments can be viewed in their entirety here:
Turns out that revisions to historical real wage growth figures issued by the Bureau of Labor Statisticsyesterday are actually fairly "inconvenient" for Obama. Time to get the band back together for a reunion of that "doom and despair" tour.
In yet another stunning tribute to the "accuracy" and "consistency" of economic propagandadata being reported by our government agencies, the Bureau of Labor Statistics yesterday reported a massive downward revision of the 1Q 2016 YoY real wage growth from +4.2% to -0.4% (a 4.6% swing).
But we wouldn't worry much about it because the revisions resulted in only "small" changes in the underlying data according to the BLS:
Indexes of all hours-related measures in the business, nonfarm business, and nonfinancial corporate sectors show historical revisions because hours in the base year of 2009 were revised; resulting revisions to percent changes are small.
We guess "small" would be one way to describe a 4.6% swing in YoY real wage growth...we would probably choose something more like "abysmal" or "disastrous" but we're not ones to split hairs. Revisions to manufacturing wages and durable manufacturing wages were even worse. Real manufacturing YoY wage growth was revised from +2.8% to -4.3% (a 7.1% swing) while real durable manufacturing YoY wage growth was revised from +1.9% to -5.6% (a 7.5% swing).
Adding to the "inconvenience," 2Q 2016 real wage growth didn't look much better declining -1.1% QoQ.
Proving that economic data is extremely "reliable," a look back at the longer term history shows that large quarterly revisions occurred all the way back to 2Q 2013.
We're eagerly awaiting Obama's press conference where he is expected to discuss these 1Q 2016 revisions. After all, as Obama has pointed out many times in the past, data that might look bad for his Presidency is typically not really that bad at all...it's just that he needs to explain it in a way that we can all understand it. We're looking forward to the explanation on this one.
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