Friday, October 05, 2012

Employment Wierdness

The “Establishment Data” portion of the September report by the Bureau of Labor Statistics says that the economy created 114,000 new jobs. The “Household Data” says that the labor force increased by 418,000, which would seem to hint that unemployment would be increased, but it also says that unemployment decreased from 8.1% to 7.8% during the month. Odd.

When 418,000 new workers share 114,000 new jobs, unemployment drops?

Even more strange is that the Household Data says that employed workers increased by a whopping 873,000 in September. Interestingly, the media is not quoting this number, probably because nobody believes it, even though it is this number upon which the much touted drop to 7.8% unemployment is based. Usually the drop in unemployment is based on workers dropping out of the work force but, oddly, that number is not reported for September. Perhaps they are reporting them as “employed” instead.

These are “seasonally adjusted” numbers, remember, and nobody knows how these seasonal adjustments are arrived at. It's a secret formula known only to the BLS. I am beginning to believe the “seasons” upon which the adjustments are based have nothing to do with the Julian calendar, but are based on how many months until the election.

1 comment: