The media have switched jobs stats midstream

[dude1394]

Another great article from buzz charts about how the media (and of course the dimocrats) have managed to change the debate on the unemployment numbers.



BuzzCharts



Since the president's tax cut was fully implemented last May the unemployment rate has dropped rapidly from 6.3 percent to 5.6 percent today. Everyone knows this. It's one of the fastest declines in unemployment in decades. The problem is, this is a presidential-election year. Hence, improving economic statistics will not be accepted by the mainstream media no matter what those statistics say.

The Bush bashers on radio and television have been saying that unemployment doesn't matter; that its payroll jobs that count. Lou Dobbs, host of CNN's Moneyline, recently said this while debating Steve Forbes on the air. Forbes cited the growth in jobs under the household survey, the survey used to determine the unemployment rate. Dobbs countered, "Who uses the household survey anyway?" The answer, Lou, is that up until the household survey started to show good news, you and almost every other financial journalist in America used it.

Remember how business and financial reporters measured the health of the job market back in the '70s, '80s, and '90s? Right. They used the unemployment rate. In the 1970s they invented a statistic called the "misery index" which added the inflation rate with the (yes, you guessed it) unemployment rate. During the deep recession which occurred between 1981 and '82, before the Reagan tax cuts were officially implemented, the Gipper was hammered with "high unemployment" rates. During the recession of '91, Bill Clinton, by way of a willing media, was able to attack George Herbert Walker Bush using unemployment rates that hovered around 7 percent.

The point here is that the nation has historically focused on the unemployment rate when it comes to measuring the health of the jobs market. All of a sudden, however — just when the unemployment statistics have given us an unbroken series of good tidings — we've seen a switch to the importance of the payroll jobs survey as the preferred metric of the labor climate.

[Mavdog]

What about the additional 4 Million that have left the workforce?

How does this burst of economic exuburance explain the fact that in june, when the graph says unemployment peaked, there were 148.1 Million employed, but in February only 146.1 Million people were employed? Let's see, fewer people employed but the unemployment rate decreases?

Fun with numbers...

[dude1394]

Scoreboard dude... that's the whole point of the article, that the media (and yourself) instead of using the traditional numbers that have always gauged unemployment a new (of course unverifiable metric) has been promoted.

[Mavdog]

The "traditional numbers"?
So the unemployment rate goes down, while there is a DECREASE in the number of workers employed. Odd...if there are fewer employed, the unemployment rate should go UP.

Are there fewer unemployed workers as the decline in the unemployment % should show? NO, just fewer unemployed workers used to calculate the number (the 4 million mentioned above). If classified as out of the workforce and not seeking work, they aren't included in the unemployed stat

like I said, fun with numbers....

[FishForLunch]

For the unemployed it does not matter if the % unemployment goes up or down. The only people who can help create jobs are Small & Large business. They can do it only under favorable business conditions. If Kerry manages to convince the American people that he will provide favorable business conditions under his adminstration then he will win. So far I have not heard any of his ideas on improving the jobs outlook, all he does is blame Bush. I guess we will have to wait till Fall to hear any of his ideas.

[Chiwas]

If Kerry manages to convince the American people that he will provide favorable business conditions under his adminstration then he will win.

I think this is correct. He never will win blaming Bush but making positive and understandable statements about the way he will face the economic issues that affect people.

The media have switched jobs stats midstream

Economics numbers are maleable. Every politician knows it.

[dude1394]

How long have we been using the unemployment numbers chiwas? My lifetime at least. How are the "malleable" now. They are not "economics" numbers they are a flat-out count of the unemployed the same way they have been counted for many,many years.

[mary]

Originally posted by: dude1394
How long have we been using the unemployment numbers chiwas? My lifetime at least. How are the "malleable" now. They are not "economics" numbers they are a flat-out count of the unemployed the same way they have been counted for many,many years.

First of all, that statement is just flat-out incorrect. The unemployment statistic has never been a flat-out count of anything - its a statistical estimation based on a random sample of information gathered through surveys (as the article mentions). The flaws of this statistic have long been discussed and known for many years, at least to those in academia.

In order to be counted as "unemployed", you must be considered a part of the potential workforce. In other words, you must be actively looking for a job. This discounts the fact that many people become "discouraged" from looking for a job and simply withdraw from the workforce all together. Another problem with the stat is that there is no differentiation between part-time and full-time workers. In fact, if you are paid just 1 hour for work during a week, you are considered to be employed, just as if you worked an entire 40 hours.

It is nothing "new" to look at other employment statistics (like nonfarm payrolls) in conjunction with the unemployment rate, to measure the health of the job markets. No self-respecting economist would use the unemployment rate alone to make an assessment of aggregate employment. As far as I know, these "other" statistics have long been reported in such mainstream publications as the Wall Street Journal and the Investor's Business Daily. There simply is nothing "new" about it.

All of these statistics can be "verified" through the Bureau of Labor Statistics (www.bls.gov) which is in charge of conducting all of the national employment surveys.