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BLS Employment Report, Recession Watch, Inflation and the Fed

By Victor Sperandeo with the Curmudgeon

Analysis of June BLS Employment Report:

The total jobs created for the first half of 2022 reported as Seasonally Adjusted was +2,740,000 or +456,000 average per month. In contrast, the Non-Seasonally Adjusted (NSA) non-farm payroll data was +2,340,000. After deducting (the not seasonal adjusted) Birth Death Model (BDM) of (682,000) for a net +1,658,000 total jobs added or a net average of 276,000 average jobs created per month. Therefore, the headline (SA) number of 1st half 2022 jobs created is 1.65 times the NSA not including the BDM. That’s quite a contrast!

The BLS employment data is “seasonally adjusted” to show what they want the public to believe which provides the rationale for the Fed to execute the monetary policy they desire.

The BLS reported on Friday (emphasis added): “The labor force participation rate was 62.2%, while the employment-population ratio was 59.9%. Both measures remain below their pre-pandemic February 2020 values. The number of persons not in the labor force who currently want a job was essentially unchanged at 5.7 million in June. This measure is above its February 2020 level of 5.0 million. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job.”

However, the BLS does not openly state the total number of people who are not counted as part of the labor force. You have to search for the “U.S. inactive labor force: seasonally unadjusted monthly number May 2022.”

In May 2022, the inactive labor force amounted to about 99.52 million people in the United States. Labor Force measures are based on the civilian non-institutional population 16 years old and over. So, 99.52 million people are not working and not counted due to the criteria the BLS creates!

Monthly number of inactive labor force of the United States from May 2021 to May 2022 (in millions, not seasonally adjusted)

In summary, the BLS makes and changes the job number rules to make the U.S. economy look better than it actually is. The BLS is composed of 12 people, almost all academics, that affects the lives of 334.8 million people living in the U.S.

Shadowstats’ John Williams Comments:

  • Headline June 2022 Payroll Employment still held a half-million jobs shy of recovering Pre-Pandemic levels.

  • Payrolls also held shy by about 3.9% (-3.9%) or by 6.1 (-6.1) million jobs of where they would be, had the U.S. economy continued its relatively stable trends in place before the externally driven Pandemic shut it down.

  • How can the U.S. Economy be fully “Recovered” and booming, as so heavily touted by the Federal Reserve in its hiking of Interest Rates, given the headline contraction in First-Quarter 2022 GDP, along with early indications for a contraction in Second-Quarter 2022 GDP?

  • In context of a continuing shift of headline discouraged workers from headline U.6 unemployment into the nether world of long-term discouraged/ displaced workers, who are not “tracked” by the Bureau of Labor Statistics (BLS), but who are included in the ShadowStats Alternate Unemployment estimate, the headline June 2022 U.3 Unemployment Rate held steady at 3.6% for the fourth month, with the broader U.6 easing to 6.7% in June from 7.1% in May, and with the still broader ShadowStats Unemployment Estimate holding above 24%, notching lower to 24.3% in June, from 24.6% in May, on top of the U.6 decline.

Historical Quote and Analogy:

Permit me to quote someone who voiced similar skepticism. Josiah Charles Stamp, 1st Baron Stamp (21 June 1880 – 16 April 1941) was an English industrialist, economist, civil servant, statistician, writer, and banker. He was a Director of the “Bank of England” and chairman of the London, Midland and Scottish Railway.

Stamp said: "The government are very keen on amassing statistics. They collect them, add them, raise them to the nth power, take the cube root and prepare wonderful diagrams. But you must never forget that every one of these figures comes in the first instance from the chowky dar (village watchman in India), who just puts down what he damn pleases." (Stamp recounting a story from Harold Cox who quotes an anonymous English judge).

Upon close investigation of U.S. government published data, I’ve found Sir Stamp’s view to be 100% correct!

The CPI, for example, is 100% subjective, does not measure anything accurately and can be manipulated to be anything the BLS wishes it to be. The CPI is used politically to paint a picture of what the U.S. government wants the public to see and believe?


I do not trust or use any data from the U.S. government, including agencies (e.g., the BLS, BEA, etc.), affiliates or even the institutions that are potentially influenced by the government’s power. Instead, I do my own deep due diligence for “investment” purposes only. That involves analysis of original source documentation with verification from credible sources.

Curmudgeon Comment:

Economists expect that the CPI for June 2022, to be released on July 13th, will hit a fresh 40+ year high of 8.8%, according to a poll conducted by Reuters. [The monthly core index is forecast to decline to 5.8% from 6.0% in May.] The CPI probably rose nearly 9% in June from a year earlier, based on the median projection of economists in a Bloomberg survey. If those forecasts are correct, count on a 75 bps Fed Funds rate hike at the FOMC meeting on July 27th.



“Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again. However, take away from them the power to create money and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money." Said to be from an informal talk at the University of Texas in the 1920s.


The statements in this communication are the opinions of its author, Victor Sperandeo, and are not to be relied upon by anyone as the basis for an investment decision. Any investments made by a party in reliance thereon are made at such party’s sole risk. No guarantee of any kind is implied or possible where opinions as to past or future market conditions/events are provided. Past performance is not necessarily indicative of future results.


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