Readers may remember the strangely optimistic September 2012 jobs report that showed a three-tenths of a percent decline in the U-3 jobless rate just five weeks before the presidential election. At the time, a number of people wondered if the Bureau of Labor Statistics and the Census Bureau cooked the books on the report, which pushed the official jobless rate below 8% for the first time in Barack Obama’s presidency. Last night, the New York Post’s John Crudele wrote that an anonymous official at Census claims that they did cook the books, and wants to talk to Congress about it. Crudele also got one Census employee to go on the record and admit his manipulation:
Just two years before the presidential election, the Census Bureau had caught an employee fabricating data that went into the unemployment report, which is one of the most closely watched measures of the economy.
And a knowledgeable source says the deception went beyond that one employee — that it escalated at the time President Obama was seeking reelection in 2012 and continues today.
“He’s not the only one,” said the source, who asked to remain anonymous for now but is willing to talk with the Labor Department and Congress if asked.
The Census employee caught faking the results is Julius Buckmon, according to confidential Census documents obtained by The Post. Buckmon told me in an interview this past weekend that he was told to make up information by higher-ups at Census.
How did the manipulation take place? The key to this puzzle is in the methodology used by BLS to derive the jobless rate. They conduct two surveys, Household and Establishment. The jobless rate comes from the former, while the official jobs added figure comes from the latter. It was the Household survey that picked up the highly unlikely figure of 873,000 jobs added in September, which wasn’t the official jobs added figure (that was +114K), but skewed the jobless rate significantly downward anyway — even while the U-6 overall unemployment/underemployment figure didn’t budge at all.
These are telephone and in-person surveys taken in the middle of the month, and the Department of Labor requires Census to get a 90% success rate on its interviews — meaning that 90% or more of those contacted complete the entire survey. When Census couldn’t reach that level of completion, Buckmon claims that surveyors simply started making up numbers:
Census currently has six regions from which surveys are conducted. The New York and Philadelphia regions, I’m told, had been coming up short of the 90 percent.
Philadelphia filled the gap with fake interviews.
“It was a phone conversation — I forget the exact words — but it was, ‘Go ahead and fabricate it’ to make it what it was,” Buckmon told me.
This is more than just an election issue, Crudele reminds his readers. Investors make critical decisions based on BLS data and its reputation for integrity — and so does the Federal Reserve:
To cite just one instance, the Fed is targeting the curtailment of its so-called quantitative easing money-printing/bond-buying fiasco to the unemployment rate for which Census provided the false information.
So falsifying this would, in essence, have dire consequences for the country.
Indeed. It will also have dire consequences for the Obama administration, which has been in an integrity meltdown all year long, but which has accelerated as the last few weeks.