A Reuters news item describes the US economy as being “on solid ground” due to an employment “surge”
in December employment, not thinking that much of that surge might have been part time and/or temporary holiday jobs, and specifically discarding “a troubling international backdrop.” Other news items have used the same report to describe the economy as “on the right track” and “encouraging.”
First of all, the report did not actually portray the “robust employment data” that Reuters claims it did. The 292,000 job increase was from the “Establishment Survey,” which reports jobs filled. Since many of those may be (are) part time jobs and the people filling them are people who were already working at other part time jobs, the impression of newly employed people is inflated. Additionally, if an employer creates a temporary job lasting one week, that is simply reported as a “new job created.” If the employer does that two or three times, it is reported as two or three jobs created.
The “Household Survey” reports only 192,000 newly employed persons, and it does that only by means of a “seasonal adjustment” to the numbers. Without that adjustment, that is by using the numbers as actually counted, the employment market actually lost 93,000
jobs in December.
Which numbers are accurate? Well, I don’t know, and that really is my point.
And to conclude from this reporting that employment is going in the right direction and start waving pompoms is particularly absurd. There were 3.5 million jobs added in 2014 and only 2.95 added in 2015 which, being a decrease of 15%, is most certainly not the right direction in a job market that is still well below full employment. Even worse is that manufacturing, which added 500,000 jobs in 2014, added only 30,000 in 2015. That’s a decrease of 94% - absolutely not “on the right track.”
They even mention that salaries are flat, not really even keeping up with inflation, and simply toss that aside with the impression of, “Oh well, we’ll deal with that later.”
And the “international backdrop,” which they so blithely ignore, is a good bit more than “troubling.” Notice what’s happening in China right now? The Chinese economy is essentially crashing, the Japanese economy is doing that slow motion thing like two planets colliding in a sci-fi film, and most of Europe is clearly heading into recession if it isn’t already in one.
Reuters is apparently in the economic camp that believes that America has “decoupled” from the world economy and will be unaffected by economic conditions outside our borders. I’m sure the ostrich felt that way, too, until a lion came up and bit it in the ass.