BLS BS Exposed: Commercial Bankruptcies Soar
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The McClatchy Washington Bureau is reporting Commercial bankruptcies soar, reflecting widening economic woes.
Commercial filings for the first half of 2008 are up 45 percent from last year, as the national climate for commerce continues to deteriorate amid rising energy and food costs, mounting job losses, tighter credit and a reticence among consumers to part with discretionary income.BLS BS
From April through June, 15,471 U.S. businesses called it quits, according to data from Automated Access to Court Electronic Records, an Oklahoma City bankruptcy management and data company.
It was the 10th straight quarter that business bankruptcy filings have increased. Nearly 29,000 companies filed in the first half of 2008. Another 60,000 to 90,000 others probably have closed, because roughly two to three businesses fold for every one that files for bankruptcy, said Jack Williams, resident scholar at the American Bankruptcy Institute.
More than 20 percent of the newly shuttered businesses were in California, which logged 3,141 bankruptcies in the second quarter.
Texas fielded the next highest number of bankruptcies with 1,168, followed by Michigan with 702 and Florida with 635. New York was next, with 618 petitions, and Colorado had 547.
Commercial bankruptcy filings reported by Automated Access to Court Electronic Records are typically higher than official government figures due to a more thorough reading of the petitions.
With the above in mind, let's take another look at my July 3rd post: Jobs Decline 6th Consecutive Months.
Birth/Death Model From Alternate UniverseAmerican Bankruptcy Institute
This was a very weak jobs report. And once again the Birth/Death Model assumptions are from outer space.
click on chart for sharper image
Every month I say the same nearly the same thing. The only difference is the numbers change slightly. Here it is again: The BLS should be embarrassed to report this data. Its model suggests that there was 29,000 jobs coming from new construction businesses, 22,000 jobs coming from professional services, and a whopping 177,000 jobs in total coming from net new business creation. The economy has slowed to a standstill and the BLS model still has the economy expanding quite rapidly.
Repeating what I have been saying for months now, virtually no one can possibly believe this data. The data is so bad, I doubt those at the BLS even believe it.
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This report was the 6th consecutive contraction. Service jobs were only positive because 29,000 government jobs were created. Yesterday in Downward Spiral In Jobs I commented on interesting stats from the ADP Small Business Report giving a breakdown of jobs by size of firm. Inquiring minds will want to take a look.
It was the 10th straight quarter that business bankruptcy filings have increased. Nearly 29,000 companies filed in the first half of 2008. Another 60,000 to 90,000 others probably have closed, because roughly two to three businesses fold for every one that files for bankruptcy, said Jack Williams, resident scholar at the American Bankruptcy Institute.
BLS
The BLS reported net expansion of new businesses in all but 3 of the past 15 months. January and July are months in which they partially correct for the ridiculous assumptions made in the other months.
I expect a huge downward revision in the July data which will be published on August 1.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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