Census hires to wildly inflate May employment numbers?

Advance word on this week’s employment numbers due on Friday morning is that the figure will be eye-popping — a growth of over a half-million jobs in May.  However, only a third or less will come from the private sector.  Most of the rest will come from an explosion of Census Bureau hires last month, some of which have already ended, according to The Hill:

Hiring by the U.S. Census Bureau is expected to spike May’s job figures dramatically.

Economist Mark Zandi of Moody’s.com projects the economy will add 575,000 jobs in May, while the Economic Policy Institute’s (EPI) rough projection is for 560,000 jobs. …

Vice President Joe Biden, speaking at a Democratic fundraiser on Tuesday, touted what he said would be a positive report for Democrats, who are hoping a revitalized economy will help them in this fall’s elections. He said the May report would be “well beyond” the 290,000 jobs created in April, according to Reuters.

The numbers pose a problem for the administration, however, in terms of their reflection of economic growth.

Zandi expects that only 150,000 of the jobs created in May will come from the private sector, while 425,000 new jobs are sparked by the once-a-decade census.

Those jobs are temporary ones that will disappear as the Census completes the process of collecting data from people who did not mail in their forms.

In fact, if Zandi is correct, the inflated number will obscure a drop in private-sector growth.  April’s employment figures showed the addition of around 224,000 private-sector jobs, the first significant growth against population expansion in more than two years.  Adding 150,000 jobs would still beat population growth — it takes adding more than 100K jobs to keep pace — but not by much.  That would signal a slowing economy, not a move to sustainable growth, although one month could also be a hiccup — just as April’s could have been a hiccup as well.

The Census employment numbers have their own issues as well.  People who get laid off and recalled apparently get counted twice as new hires, although that shouldn’t affect monthly employment figures as much as it does the Census Bureau’s own statistics:

A couple weeks ago I found out that Census was repeatedly hiring and firing workers without any apparent reason. I questioned if this was being done to artificially boost the nation’s employment figures since the Labor Dept. considers it a new job created whenever someone is hired to work as little as one hour in a month.

Was Census churning jobs to make the economy look healthier than it really is?

Technically,the BLS surveys for employed people, not the gross number of hiring actions.  Theoretically at least, one person hired 30 times in a 30-day month would still represent just one employed person to the BLS, not 30.  What John Crudele found sounds more like the Census Bureau overstating its economic impact, not a serious attempt to skew the official labor numbers.

Of course, the big issue for the Obama administration is what happens when the Census Bureau completes its work.  Hundreds of thousands of workers will be back looking for jobs that won’t exist, which will spike the unemployment number later in the year, just when voters go to the polls.  If the private-sector numbers come in as weakly as Zandi predicts, it could be a sign that we’ve just about squeezed all of the growth possible from the artificial stimuli applied by the Democrats.