Bank CEO: Fed Jobless Numbers Are ‘Cooked’

Robert Donachie | Capitol Hill and Health Care Reporter

An unnamed bank CEO sent an email to journalists at the Wall Street Journal where he or she claimed the Federal Reserve Bank is using “cooked” numbers to forecast inflation.

But, there are a number of things wrong with the claims made by this individual.

Kate Davidson, a journalist at the Wall Street Journal covering the U.S. economy and central banks, tweeted out the email Tuesday afternoon with the caption: “I don’t even know where to begin with this e-mail FROM A BANK CEO.”

“In an act that defies reason, the Fed Reserve’s FOMC is still using the jobless numbers to forecast inflation. Did they forget that number is cooked,” the CEO exclaimed. The bank executive notes that the “Fed cooked it when they dropped those who gave up looking for work. Labor participation is the number to watch, because it includes those who gave up, but want gainful employment.”

The labor force participation rate, however, has remained steady for much of 2016 and even marginally ticked up in September.

Also, the assertion that the labor force participation rate “is getting worse,” is simply not true in fact or otherwise.

The most recent employment report from the Bureau of Labor Statistics shows that the number of discouraged workers, persons not currently looking for work because they believe no jobs are available for them, has changed little from September of last year.

The unnamed executive also made the claim that “the economy will not expand or create real job growth until Congressional Fiscal Policy ceases being so toxic for business.”

If this unnamed executive had checked the most recent numbers, they would have found their claim to be anything but true. Real Gross Domestic Product increased 1.4 percent in the second quarter of 2016, and it increased 0.8 percent in the first quarter. Growth in GDP is evidence of a growing economy, plain and simple.

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