Friday, September 04, 2009

Where do you put those revised job losses? 

The unemployment rate shot up, and while employment levels declined less than expected last month, some of that is accounted for by an upward revision in June and July unemployment.
The change in total nonfarm payroll employment for June was revised from -443,000 to -463,000, and the change for July was revised from -247,000 to -276,000.
So if you added that extra 49,000 jobs that weren't previously accounted for to the 216,000 loss reported for August, would you call this good or bad? If you buy the idea that deceleration is what matters (the second derivative, for you calculus types), then you'd say those revisions are positive.

I think the White House has actually portrayed these data well, with the president saying "we have a long way to go", and judging from this collection of business economists' reactions, there's not much really good in here. Meanwhile the surge in productivity is huge, which means output will turn around and grow well before employment does, which supports the idea that we could end up in December 2010 with 2 million fewer working than at the end of 2008.