Pack journalism found the easy story in Friday’s Labor Department announcement -- that U.S. job growth was gangbusters in April. Since good news is bad news these days, this was as about as bad as it gets. As everyone knows, evidence of such robust payroll growth will all but clinch another interest rate hike in June. In case there were any doubts about this, figures for February and March were revised upward to reflect purportedly significant gains in those months as well. Here’s the way the Wall Street Journal wrote it up: “The American job market may finally be catching up with the economy’s growth. The evidence early Friday sparked hopes among investors that recent signs of a ‘soft patch’ were overblown, before fears of more aggressive interest-rate increase kicked in by day’s end.”

We’ve come to expect better from the Journal, which may be the only big-circulation daily in America that has deigned to tune out Paris Hilton, celebritydom’s reigning Antichrist. Be that as it may,  we searched the paper’s online round-up in vain for Friday’s real story -- that Uncle Sam’s spinmeisters have resorted to a statistical full-court press to condition the American public for more credit tightening. As evidence, consider the following. Non-farm payrolls were said to have grown by 274,000 jobs in April, nearly 100,000 more than “expected.” But according to a source I deem more trustworthy than Labor’s public relations department, 250,000 of the supposed jobs came from a statistical sleight of hand called the Birth/Death Adjustment. Here’s how it works: As companies are born and others die, jobs are created and lost. But because not all such activity is measured by surveys, the government’s statisticians simply try to guess how many jobs they should add or subtract in a given month to account for this factor.

Fudge Factor

What this means is that, if the government wants to impute strong, or weak, job growth to a particular month, it need only employ the Birth/Death Adjustment in such measure as spin management requires. In this case, assuming 25,000 real jobs were magically transformed into 274,000 “hedonic” jobs, the fudge factor amounts to more than 1,000%. (For a link to the actual birth/death model, click here.  Elsewhere on the DOL site is an unintentionally amusing FAQ.)  The message to investors could not be clearer: now that payroll growth is finally kicking in, America’s economic engine has shifted into high gear. News like that is not intended merely to justify another 25-basis-point rate hike, but to make it seem like a blessing when it finally comes. Meanwhile, when the rigged numbers hit the tape, bond and stock traders have little choice but to take them at face value, acting as though the economy is heating up no matter what they might believe personally or collectively. But to infer that these statistics are free of political taint or purpose is to succumb to Kudlow-esque delirium – one that sees the weakest economic recovery since the Great Depression as the very picture of health.

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Visiting Britain? Bring Your Mittens...

(From the London Times)

Climate change researchers have detected the first signs of a slowdown in the Gulf Stream — the mighty ocean current that keeps Britain and Europe from freezing. They have found that one of the "engines" driving the Gulf Stream — the sinking of supercooled water in the Greenland Sea — has weakened to less than a quarter of its former strength. The weakening, apparently caused by global warming, could herald big changes in the current over the next few years or decades. Paradoxically, it could lead to Britain and northwestern and Europe undergoing a sharp drop in temperatures.

Such a change has long been predicted by scientists but the new research is among the first to show clear experimental evidence of the phenomenon. Peter Wadhams, professor of ocean physics at Cambridge University, hitched rides under the Arctic ice cap in Royal Navy submarines and used ships to take measurements across the Greenland Sea. "Until recently we would find giant 'chimneys' in the sea where columns of cold, dense water were sinking from the surface to the seabed 3,000 metres below, but now they have almost disappeared," he said. "As the water sank it was replaced by warm water flowing in from the south, which kept the circulation going. If that mechanism is slowing, it will mean less heat reaching Europe."

(Click to enlarge)

Such a change could have a severe impact on Britain, which lies on the same latitude as Siberia and ought to be much colder. The Gulf Stream transports 27,000 times more heat to British shores than all the nation's power supplies could provide, warming Britain by 5-8C. Wadhams and his colleagues believe, however, that just such changes could be well under way. They predict that the slowing of the Gulf Stream is likely to be accompanied by other effects, such as the complete summer melting of the Arctic ice cap by as early as 2020 and almost certainly by 2080. This would spell disaster for Arctic wildlife such as the polar bear, which could face extinction. Wadhams's submarine journeys took him under the North Polar ice cap, using sonar to survey the ice from underneath. He has measured how the ice has become 46 percent thinner over the past 20 years. The results from these surveys prompted him to focus on a feature called the Odden ice shelf, which should grow out into the Greenland Sea every winter and recede in summer.

Sinking Water

The growth of this shelf should trigger the annual formation of the sinking water columns. As sea water freezes to form the shelf, the ice crystals expel their salt into the surrounding water, making it heavier than the water below. However, the Odden ice shelf has stopped forming. It last appeared in full in 1997. "In the past we could see nine to 12 giant columns forming under the shelf each year. In our latest cruise, we found only two and they were so weak that the sinking water could not reach the seabed," said Wadhams, who disclosed the findings at a meeting of the European Geosciences Union in Vienna.

The exact effect of such changes is hard to predict because currents and weather systems take years to respond and because there are two other areas around the north Atlantic where water sinks, helping to maintain circulation. Less is known about how climate change is affecting these. However, Wadhams suggests the effect could be dramatic. "One of the frightening things in the film The Day After Tomorrow showed how the circulation in the Atlantic Ocean is upset because the sinking of cold water in the north Atlantic suddenly stops," he said. "The sinking is stopping, albeit much more slowly than in the film — over years rather than a few days. If it continues, the effect will be to cool the climate of northern Europe." One possibility is that Europe will freeze; another is that the slowing of the Gulf Stream may keep Europe cool as global warming heats the rest of the world — but with more extremes of weather.