On Friday, News Editor Ed Carson at Investor’s Business Daily listed ten reasons why the job market is worse than that morning’s Employment Situation Summary from the government’s Bureau of Labor Statistics (BLS) indicated. It’s a good list, and includes several items which have failed to gain sufficient notice. I’ll get to those later.
I have a really important eleventh reason to add which everyone seems to have missed: the report’s seasonally adjusted results made it look as if there’s at least some momentum for job growth, while the raw numbers reveal that there’s really none.
Though it’s tempting, and though their methodology is in several ways suspect, I want to be clear that I’m not accusing the folks at BLS of deliberately fudging the numbers — yet (that is almost certain to happen if fever-swamp leftist Erica Groshen, the Obama administration’s nominee to head the Bureau, ever worms her way into that powerful position).
What I am asserting is that the Bureau’s continued overemphasis on seasonally adjusted results in an erratic economy with little if any meaningful discussion of the underlying raw (i.e., not seasonally adjusted) data consistently gives the public an incomplete and often erroneous picture of the job market.
Four-plus years into the period of economic abnormality — which yours truly dubbed the POR (Pelosi-Obama-Reid) Economy in July 2008 when I first saw the train wreck coming — seasonally adjusted calculations, which try to interpret fluctuating employment patterns based on time of year, are of little value. That’s because we haven’t seen normal seasonality since early 2008. Instead, the POR Economy, with its awful recession and historically pathetic “recovery,” has overwhelmed the influence of seasonal factors. Supposed journalists in the business press, many of whom don’t even know that the seasonally adjusted results don’t represent what actually happened, lazily relay BLS numbers without any kind of meaningful follow-up.
In some months, the seasonally adjusted figures have understated the strength of the underlying job market. May 2012 was arguably one of them, while June was definitely not:
As seen in May’s blue boxes:
- In the private sector, the economy added more jobs in 2012 than it did in both 2011 and 2010 (90,000 and 112,000, respectively), but the barely different seasonally adjusted result for 2012 did not reflect that improvement.
- Overall, the economy added 131,000 more jobs in 2012 compared to 2011 (comparisons to 2010 aren’t meaningful because of decennial census hiring), but the 2012 seasonally adjusted result was only 23,000 higher.