Monday, December 6, 2010

Jobs numbers verses reality

It’s just data

Given the importance of data verses interpretations, I thought this was interesting. Like people familiar with how data is manufactured say, "It's just a check on a form, not reality." (“Gyrating Numbers Are Misleading” WALL STREET JOURNAL, December 4, 2010, by Mark Whitehouse).

Meanwhile in the world of data, the issues related to seasonality of employment in the retail sector are interesting. The November seasonal adjustment to employment could be wrong, and probably is. But, is it December where it will be made up, or could the hiring have already occurred in October in an effort to jump start the holiday season? I lean toward a December jump.

What seems incredible is that no one has recognized the Obama effect. Hasn't the shift away from permanent hiring to temps been pronounced enough for anyone to make the connection? It’s been going on for a while, but seems to be the trademark of this administration for reasons that all but the most partisan observer can see. (If you don’t know what an employee will cost, how do you plan a new hire?)

The coverage in the media is interesting. They're all reporting an unanticipated jump in the unemployment rate. Do you know a single economist who hasn't said the unemployment rate would go up as the recovery proceeded? The wiser ones don’t say when, just that it will happen. Interesting thing is that while an “up-tick” in the unemployment rate was expected, the labor force participation rate is doing unanticipated things, at least unanticipated by me. But then, we aren't exactly reinforcing the work ethic.

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