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« Another "Suspiciously Timed" Intelligence Coup | Main | The Secret Martyrdom of Margaret Cho »
August 06, 2004

Jobs Figures: Garbage In, Garbage Out?

The payroll jobs survey isn't just a raw survey. It's actually adjusted to a degree by seasonal/monthly modifications in an effort to "tune out" predictable cyclical noise. Those adjustments are, of course, based on assumptions. If the assumptions fail, the numbers won't be accurate.

This guy has been complaining about these adjustments for a while, and not just when they hurt Bush. I remember reading him some time ago arguing that Bush's big-growth numbers in the Spring were also partly phatasmal, based on sketchy adjustments which might or might not bear any relationship to reality. Hack that I am, I discounted him at the time; I didn't need him raining on my cowbell parade.

But he predicted yesterday that these adjustments would "make" July a bad job-growth month, at least on paper, just as they had last July. (January, too, is always adjusted into a poor-job-growth month.)

I'm not sure what to make of all this. Do we really have any good idea at all how many jobs are being created or lost at any given time? How much of this is all just back-of-the-envelope guesswork?

We do know, with nearly perfect accuracy, how many people are signing up for jobless benefits at any time. That's not a poll; that's just counting.

If the number of people signing up for unemployment benefits keeps dropping, doesn't that suggest that more people are finding work?

Hat tip to Kausfiles.

Bill Quick has a more rigorous analysis of this phenomenon.


posted by Ace at 04:21 PM
Comments



Check out the post at BillHobbs.com for a better perspective on the job numbers, especially the total number of people working now as opposed to when President Bush took office. I am optimistic about the econonmy and job growth; however, today's job numbers are going to hurt the president.

Posted by: Dittybopper on August 6, 2004 05:49 PM

"If the number of people signing up for unemployment benefits keeps dropping, doesn't that suggest that more people are finding work?"

Not necessarily. It could mean people failing to find work _plus_ giving up on the dole (or running out of entitlement) so that they disappear from the ranks of the officially "unemployed".

Not saying that's the case, just another possible interpretation.

Posted by: Doug on August 6, 2004 05:50 PM

Unemployment down and new job creation allegedly down is indeed odd. The 32,000 number is from the corporate survey. The BLS report, however, includes a household survey as well, and those numbers showed a jump of almost 700,000.

The variance could be, as Doug mentions, people giving up and falling off the list. But I don't think so - the unemployment percentage isn't just for people still entitled to the dole. It's far broader than that.

Also, "discouraged workers" is standard response to drops in unemployment % from those who are politically inconvenienced by improvements in that number (not Doug, by the way - just generally). It's a fuzzy number, unsupported by hard statistics. So, oddly enough, is the number of people who fall of the unemployed list by starting their own businesses as 1099 contractors and the like. I tend to ignore both numbers, since they're both put forth by people trying to prove a political point, and neither is supportable. And, if you ignore both, the simple fact remains:

Unemployment is down, by more than the 32,000 number would come close to indicating. The truth is something higher, and the market will realize that as early as next week, in my humble opinion.

Posted by: Patton on August 6, 2004 09:32 PM

what if any significance does this have on your assesment.

"Total employment rose by 629,000 to 139.7 million in July, ...."

http://www.bls.gov/news.release/empsit.nr0.htm

any? or it it still dire?

Posted by: James Caldera on August 6, 2004 11:26 PM

Crudele is FOS--he hasn't been right about anything in so long it's a wonder the Post continues to publish him. Also, the household survey still looks good, and a lot of folks are dropping out of the workforce. I know a few--they simply don't have to work. Their spouses are making good coin and taxes are lower.

I refuse to believe people are getting discouraged and leaving the labor pool--it's simply counter-intuitive. The want-ads are healthy and in Bergen County there are Help Wanted signs everywhere.

Hell, I can't find anybody to clean my pool or polish my spats!

Posted by: spongeworthy on August 9, 2004 10:34 AM
Posted by: Roy on November 4, 2004 07:44 AM
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