Santelli Slams CNBC Panelists for Spinning Jobs Report

Jobs are heading up and down at the same time. The Bureau of Labor Statistics announced the morning of Feb. 4 that only 36,000 jobs were added in the month of January, but the unemployment rate dropped from 9.4 percent to 9.0 percent.

The mainstream news media will likely latch on to the dropping unemployment rate, despite job gains that were less than one-fourth of the consensus estimate of 148,000 jobs added. One of the CNBC panelists noted that the increase was "way below consensus."

CNBC's Rick Santelli even lashed out at some of the CNBC "Squawk Box" panel that were discussing the latest jobs report.

"[W]e have overwhelming evidence the jobs market is disappointing, and all of you are trying to look for that one half of spaghetti in a 50 lb. spaghetti bowl. This is not great data," Santelli claimed. "We know that the U6 probably gives you a better indication of the true unemployment rate …"

CNBC's Steve Liesman interjected: "It went down, Rick. It went down - "

"Yeah, what is it?" asked Santelli.

"It went down Rick, to 16.1 [percent]," Liesman said.

"Oh boy, guys! 16.1 [percent] is probably the unemployment rate. That's cause celebre," Rick sarcastically shouted on the trading floor of the Chicago mercantile exchange.

"But it fell from 16.7," Liesman insisted.

Santelli continued to criticize the spin: "You know what Steve? You and I both know that the unemployment rate, the labor force moving in and out, those giving up, is really probably your best statistical reason for the drop to 9.0 (percent). And in terms of jobs, you, Mr. Steve Liesman, said if you work just one day. If you stay home but you get paid you're counted in the data …"

"Right - it shouldn't be weather," Liesman acknowledged. Some of the panelists including Moody's economist Mark Zandi had blamed weather for drops in construction and other sectors.

"So this is probably less distorted," Santelli concluded.

But the fact that the two different economic surveys conducted by the BLS were moving in different directions was baffling to many. Even the liberal Economic Policy Institute noted on its blog that the picture was "muddled."

"Given the confounding nature of this report, we will have to wait at least another month to see if the labor market is rebounding strongly," Heidi Shierholz wrote for EPI.