Friday, March 04, 2005
Sean says the reporting on this report is messed up:
It's a good story, but unfortunately the data won't support it.
I'm going to pick on Reuters and reporter Tim Ahmann a little bit. Here's the lead to a story on the release of February jobs numbers:
U.S. employers added 262,000 jobs last month, the biggest gain in four months, but the good news for workers was tempered by a rise in the jobless rate....The unemployment rate is the percentage of workers actively seeking work divided by the emplyed workforce. There are times when the lots of people are finding work expanding the employed workforce. If the number of workers looking for jobs doesn't grow as fast the unemployment rate falls. There are also times when the number of workers looking for work grows faster than the employed workforce. When that happens the unemployment rate goes up.
From the February numbers it appears the number of job seekers are growing faster than the total number employed. That means many people who previously didn't think the economy as good enough to bother looking for work are now jobseeking. Why bother looking for a job if you think the economy stinks so much your effort will fail?
It's worth remembering when you hear the statistics that the employment number the press reports comes from the Current Payroll Survey (thus often called payroll employment) while the unemployment rate comes from the Current Employment Survey, which is a household survey. They are separate measures. So the 262,000 new payroll jobs reported are from CPS and are quite strong and broad-based. The numbers in the CES instead are:
Additions to #labor force: 153,000
Additions to #employed: -97,000
Additions to #unemployed: 251,000
Additions to #not in the labor force: 51,000
The CES number went down, not up, contradicting Sean's story. For a few years now we've been commenting that the CES has shown much better performance on employment than did the CPS and that the Bush Administration had not gotten enough credit for the economic expansion last year. What this month's survey could be is the reversal of the divergence between CPS and CES employment.
The argument normally used is that CES is only designed to measure the unemployment rate, and that CPS is designed to measure employment. Republicans didn't like that story last year because it made their guy look not so good. But it nevertheless might be right ... in which case today's news should be an unqualified positive.