What Do The Employment Numbers Mean?
The short answer is “I have no idea”. All we can do in macro-economics is look for trends.
I was surprised by the 9.7% unemployment rate simply because it had such a great divergence from the establishment employment survey that reported a 20,000 job loss. The household survey is said to be a better indicator of small business. I’m not so sure of that since the seasonal adjustments prove to be pretty volatile and the margin of error for both surveys is pretty high as evidenced by the +/- 850,000 downward revision in lost jobs last year. The huge correction was due to the change in imputed birth/death rate.
But what we see this time that might add a bit of optimism is that the labor participation rate increased ever so slightly – which indicated that we may have finally bottomed out. Remember, though, one month does not a trend make and we’ll have to see what happens next month to know.
In the mean time Democrats will be cooing that the stimulus worked as seen by a falling unemployment rate and Republicans will talk about failed policies seen in the 20,000 lost jobs. The word to the wise is to ignore both of them. The fact is that there’s really no way to know the effects of the stimulus since there is no alternative universe in which to test it. And even if there are scant shades of optimism in the current numbers we’ve still lost over 8 million jobs over the last 18 months.
We still have a way to go.
[Update] Oh, I forgot. The go to guy on macro data is Calculated Risk. He calls the report a mild positive.
Maybe this Gallup poll gives some guidance: http://www.gallup.com/poll/125645/Socialism-Viewed-Positively-Americans.aspx
Since 53% of Dems view socialism favorably, perhaps this explains Obama’s push to employee more Americans as govt. wards rather than face the real world.
How do census takers and H&R Block temps taken out of the equation, coupled with people that have quit looking for work impact the figures?
Extend and pretend. Take just over a million discouraged workers off the unemployment rolls because they’ve given up all hope and have no chance in hell of finding work, and your unemployment rate drops to from 10% to 9.7%. Cool trick.