Reading the fine print on the November jobs report

by John Hayward,

I hate being a jobs-report skeptic. I give the Bureau of Labor Statistics a great deal of credit for putting together an incredibly complicated statistic model of the job market every month. They really should be given three months to get the job done, but our voracious news cycle is simply not going to be patient and wait until December for September’s final numbers, even when there isn’t a presidential election hanging in the balance. I approach accusations of deliberately falsified data with hesitation, but a few of the job reports during the Obama era – especially the one right before the 2012 election – have contained such anomalous data that it’s difficult to completely rule out shenanigans.

What I hate most of all is vainly searching these reports for some sign of a robust recovery. Far too many people in the media – and some business analysts who should jolly well know better – leap on a few headline numbers and declare “The recovery has finally begun!!!” every month… month after month, stretching on into year after year. When a true recovery is under way, it won’t be an economic bacterium swimming in an economic microscope slide. We’ll know it. We know it hasn’t happened yet, which is why the American public hasn’t been buying much of the Obama-media happy talk. Maybe they feel a bit burned by how they swallowed the New Normal in 2012, egged on by promises of roaring growth that have yet to materialize.

Friday’s turbocharged jobs headline came thanks to seasonal adjustments and other wizardry at the Bureau of Labor Statistics, which reported that U.S. job growth hit 321,000 even as the unemployment rate held steady at 5.8 percent.

Great, so that “turbocharged” job report makes some awesome vroom vroom noises, and there’s a cloud of blue smoke pouring from the madly spinning tires, but the damn car isn’t moving. When you read that a large pile of jobs were created, but the unemployment rate didn’t change, you don’t need a doctorate in macroeconomics to know that something ain’t right.

A few figures to consider: That big headline number translated into just 4,000 more working Americans. There were, at the same time, another 115,000 on the unemployment line. That disparity can be explained through an expanding labor force, which grew 119,000, though the participation rate among that group remained at 62.8 percent, which is just off the year’s worst level and around a 36-year low.

Here’s one more, from John Crudele at the New York Post: he noticed the ever-present “seasonal adjustments” to the report were completely out of whack with last year’s seasonal figures, so he called the Labor Department to seek enlightenment…

The raw, unadjusted data from Labor showed that 523,000 new jobs were created in November 2013. After that figure was seasonally adjusted, the growth was reduced to 203,000.

The raw, unadjusted numbers reported Friday showed 497,000 new jobs — or 26,000 less than last year’s 523,000 raw number. Yet, this November’s adjustment resulted in a headline figure of 321,000 — or a whopping 118,000 more than last year.

If the seasonal adjustments stayed consistent Friday’s growth should have been less than last year’s 203,000!

I called Labor and checked my figures. An economist there said they were still working on an explanation and that I wasn’t the only one who asked. She said the problem might be because there wasn’t a consistent number of weeks for the survey between this year and 2013.

“This was a big question last month too,” she said, before referring me to Labor’s PR people.

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