{"id":4729,"date":"2012-10-06T11:31:57","date_gmt":"2012-10-06T15:31:57","guid":{"rendered":"http:\/\/www.jasetaro.com\/blog\/?p=4729"},"modified":"2012-10-06T11:31:57","modified_gmt":"2012-10-06T15:31:57","slug":"a-quick-note-on-the-septmeber-jobs-report","status":"publish","type":"post","link":"https:\/\/www.jasetaro.com\/blog\/2012\/10\/06\/a-quick-note-on-the-septmeber-jobs-report\/","title":{"rendered":"A Quick Note On The Septmeber Jobs Report"},"content":{"rendered":"

Like most of you I’m still trying to make sense of yesterday’s jobs report from the BLS — Bureau of Labor Statistics<\/a>… They’re contradictory, something just doesn’t smell right about them but, I can’t put my finger on what it is.<\/p>\n

I\u2019m not inclined to believe the conspiracy theories simple because as James Sherk explains over at Nation Review Online<\/a> it would be nearly impossible for the Obama Administration to cook the books. That\u2019s doesn\u2019t mean the number are right though, they\u2019re more than likely the result of a glitch or statistical anomaly:<\/p>\n

It would be virtually impossible for the Obama administration to fudge or otherwise tweak the employment numbers. The survey was conducted two weeks ago \u2014 well before the debate.<\/p>\n

Further, President Obama has no political appointees in the Bureau of Labor Statistics (BLS). Until January the BLS commissioner was a holdover from the Bush administration whose term had not expired. The agency\u2019s acting head is a member of the career civil service. Even if his campaign wanted to, Obama could not tweak the numbers.<\/p>\n

That said, it is highly unlikely that today\u2019s unemployment numbers are accurate. BLS conducts two main labor-market surveys: the payroll survey (polling employers) and the household survey (polling individuals). The household survey showed a 0.3 percent drop in unemployment and 873,000 net new jobs \u2014 the most since mid-1983. The payroll survey showed one-eighth as many jobs added (+114,000).<\/p>\n

Unfortunately, the payroll survey is probably correct. Of the two, the household survey has a much smaller sample size and thus larger margin of error. Although the two surveys tend to show the same results over time, the household survey jumps around more on a month-to-month basis. Even without fudging, the laws of statistics dictate that some polls will produce results outside the margin of error. One out of every 20 polls is somewhat wrong, and one out of 100 polls is really wrong.<\/p>\n

Today\u2019s household survey looks a lot like that one poll in 100. It reports stronger job creation than any time since the height of the Reagan economic boom. However, nothing else shows anything similar.<\/p><\/blockquote>\n

A couple of takeaways from the report; first the broader measure of unemployment the U-6 number<\/a>, that is the total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force, is unchanged from last month at 14.7%. Second the labor force participation<\/a> rate edged up in September to 63.6%,\u00a0 just 0.1% higher than it last month’s 31 year low.<\/p>\n

A few other observations… The household survey show 873,000 jobs were created last month, that’s not unprecedented; though the last time it happened was in June 1983. That was during the Reagan boom when the country’s Gross Domestic Product was growing at a blistering 9.3% rate.<\/a><\/p>\n

We’re not seeing anywhere near that kind of economic activity now though. As I noted previously<\/a> GDP for the second quarter was just 1.3% and the consensus of economists is that the economy is currently growing at a dismal 1.5%.<\/p>\n

Factory orders were down in August<\/a> and weekly jobless claims edged higher last week<\/a>.<\/p>\n

Bottom line, we’re not seeing the kind of economic activity we need to, there was report<\/a> from the Associated Press a few days ago detailing how unemployment rates fell in nearly 90 percent of large U.S. metro areas in August, mainly because more people gave up looking for work. While I wouldn’t dismiss the September jobs report out out of hand, I wouldn’t breakout the champagne yet either… It’s mixed bag at best.<\/p>\n

Related<\/strong><\/p>\n