The first two of the numbers everyone has been waiting for are in, and things look good for the home team. Shaila Dewan of NYT notes that
the September unemployment rate fell to 7.8%, down from 8.1% in August. The new rate is the lowest in Obama's presidency. That's in spite of the "modest" increase in the number of jobs, 114,000 new jobs in September.
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| Secretary of Labor Hilda Solis |
The RWNJs (no link from here; they're not hard to find) are about to shit their pants about this.
Krugman points us to a
CNBC post by Dan Fastenberg explaining how the Bureau of Labor Statistics (BLS) utterly and credibly rejects claims that the changes in employment numbers were falsified. Look: I've known a few federal civil service employees in my time. They have explained their conditions of employment to me, and one of the surest ways to get oneself fired from a decently paid, quite secure job is to tamper with research results for partisan purposes. That's not what happened here; the wing-nuts may as well get the twist out of their knickers.
So... beyond being accurate and correctly executed, is this report significant? does it mean good things for jobs in the marketplace?
Nate Silver of FiveThirtyEight says YES, and explains his reasons for saying so. Be sure to read past the break in his post for details. Note, in fairness, that Silver demonstrates that a drop in unemployment rate is historically
uncorrelated to not a guarantee of an incumbent president's re-election.
But such a drop certainly puts a spanner in the works of Rmoney's determination to make his campaign about jobs (on Wednesday, for the first time I've heard). And considering the chaotic economic mess George W. Bush left for Obama to clean up, any sign of positive trending is welcome. Of course I'd rather see 5% unemployment; I suspect everyone except the wealthy bastards would prefer a lower unemployment number. But a consistently declining number is not bad.
Sorry, but has everyone forgotten that schools start in September, and there is always a drop in unemployment because of that.
ReplyDeleteThis is like the economic reporters who can't understand why people would be buying more 'stuff' in August than July.
I predict that there will be an increase in consumer spending in December as well as an increase in employment...
Bryan, that may well be, but I believe unemployment has ticked slightly down for the past three months, if you take into account the corrections BLM issues in subsequent months. Maybe my memory is faulty...
DeleteAlso, I could see an error in interpretation of the percentage if an additional large number of people have given up looking for work in the past month, but I know of no reason why that should be more true in September than in prior months. I have effectively given up looking, but I did so a long time ago, and hence have long since stopped being counted in the numerator OR denominator.
DeleteOh, and one more thing about schools starting in September: in some school districts, teachers are permitted to divide their salaries over 12 months rather than 9, so that they are employed year-round.. IIRC, Texas is such a state. It's amazing what one learns growing up in a schoolteaching household.
DeleteAs for December, severe recessions not infrequently negatively impact both holiday gift purchases and temporary sales staff employment. YMMV.
DeleteAnd, last but not least, from BLS's "Seasonal Adjustment in the Current Employment Statistics Program":
Delete=============
Many Current Employment Statistics (CES) data users are interested in the seasonally adjusted over-the-
month changes as a primary measure of overall national economic trends. Therefore, accurate seasonal
adjustment is an important component in the usefulness of these monthly data. The CES Program
employs concurrent seasonal adjustment methodology to seasonally adjust its National estimates of
employment, hours, and earnings. Under concurrent methodology, new seasonal factors are calculated
each month, using all relevant data up to and including the current month.
=============
I should have known they would include seasonal compensations.
Steve,
DeleteDuring the last two days, I have been following this through several sites i.e. "the businesses insider", "le monde-international", "liberation", "the Independent-World" etc, just to mention a few, and the all write the same thing.
I didn't dare to write before, as O had been disappointing on his first debate...
So this is really very good news!
.. and something encouraging ..
Hopefully the next debate of P.O. will be much better
In Ohio, Romney says his "heart aches" for jobless (sic):
Deletehttp://in.reuters.com/article/2012/09/26/us-usa-campaign-idINBRE88N13D20120926
Romney: Economy continues to struggle under Obama:
http://www.reuters.com/article/2012/10/05/us-usa-campaign-unemployment-romney-idUSBRE8940XT20121005
Enfant, the presidential debates are a "tradition" of relatively recent origin. They correspond approximately with my adult lifetime. Originally they were sponsored by the League of Women Voters and retained some measure of independence from the political parties. Of course, that didn't please the two major parties at all, so they formed the Commission on Presidential Debates, a nongovernmental non-profit 501(c)(3) organization which underwrites the debates using private donations. This assures, of course, that no third party candidate has participated recently; I believe the last was Ross Perot in 1996. With the debate participants and format both wholly controlled by a private corporation, there is a limit to the amount of information one can glean from them, but as people remember the old days and the LCV-sponsored debates, participation in today's debates is still essentially mandatory for a major-party candidate... and impossible for a minor-party candidate.
DeleteI am sorry to report that Jim Lehrer is typical of the quality of debate moderators. He himself is a Republican and doesn't hesitate to favor the Republican candidate in not-so-subtle ways like shutting down the Dem candidate, but never the GOP candidate, in mid-sentence. A lot of people don't even watch the debates, and their impact is usually relatively small. Candidates typically win or lose on the economy, which is why the jobs numbers are so important.
(Thanks for the links.)
Bryan, take a look at the various models examined by Paul Krugman, who eventually concludes: "So contra Romney, this is a real recovery. Modest, but real. Unless, of course, you believe that there’s a conspiracy of socialist statisticians …"
DeleteSteve, the number of new jobs is seasonally adjusted, which is why it is only about 114K, but the unemployment rate is the number of people with jobs subtracted from the total work force producing the the number of unemployed. The number of unemployed is then divided by the total work force to produce the unemployment rate.
DeleteThe decrease in the unemployment rate was produced by an increase in the number of people with of over 800K, not 114K. The difference between those two figures is 'the seasonal adjustment'.
The unemployment rate isn't seasonally adjusted, only the number of new jobs.
The number will be adjusted because I doubt that schools actually hired as many people this year as last, so, depending on the source of the employment data, I would guess that the number of new jobs will be revised upward, i.e. many of the jobs thought to be related to school hiring were actually weren't. but were new jobs.
The 7.8% is affected by the opening of school, but the other number isn't.
You don't need a model as it is apparent from the data, and the calculations are not complex.
The Republicans are pointing out that 114K jobs won't produce the .3% drop in the rate, which is true, but irrelevant because it doesn't include the seasonal adjustment.
Of course the real unemployment rate is much high, at least twice as high, and we need 125K more jobs every month to keep pace with the new people entering the job market.
The economy still sucks, just no as badly as it did last month.
Bryan, I see what you're saying, but I can't get around Krugman's conclusion that "... this is a real recovery. Modest, but real." Krugman is indisputably politically liberal, and if one is so inclined (I am not) one can criticize his economic analyses based on his liberal worldview. But I've never seen any real evidence that he is any sort of enthusiast for the Democratic Party, certainly not enough to compromise his professional opinion just for their advantage.
DeleteI think it is quite possible that we will see a far worse economy in the relatively near future. And if Rmoney becomes president (through election or, um, other processes), we will see a cataclysmic failure of the economy within his first term. Yes, I am engaging in lesser evilism, as I usually do.
US unemployment rate at four-year low of 7.8% boosting Obama campaign (with video)
ReplyDeletehttp://www.vancouversun.com/business/economy/Video+unemployment+rate+four+year+boosting+Obama/7350182/story.html
Lower US unemployment may boost Obama
http://www.channel4.com/news/us-unemployment-figures-a-boost-a-disappointment-for-obama
US unemployment rate hits Obama-era low
http://www.bbc.co.uk/news/business-19845234
US unemployment rate falls to 2009 low, boosting Obama's campaign
http://www.theaustralian.com.au/business/wall-street-journal/us-unemployment-rate-falls-to-2009-low-boosting-obamas-campaign/story-fnay3ubk-1226489671060
Boost for Obama as US jobless rate falls to four-year low
http://www.telegraph.co.uk/finance/economics/9589767/Boost-for-Obama-as-US-jobless-rate-falls-to-four-year-low.html