Jobs: False 'Improvement,' Proposed Destruction
Remember when our president was telling us that his number one focus would be Joe Biden's favorite three-letter word ("J-O-B-S, jobs!")? It's hard to believe, but it was only six weeks ago ("Obama to recast agenda to focus on jobs, deficit") at the State of the Union address.
True to his word (not), it's been virtually all health care, all the time since, including a new wrinkle that would seriously cripple the employment market.
Today was a big day in America. Only 36,000 people lost their jobs today, which is really good.
Besides falsely characterizing the nature of the result, Reid betrayed a fundamental misunderstanding of what Uncle Sam's monthly Employment Situation report really tells us. It is a knowledge gap apparently shared by the press, most politicians, and a large percentage of the country's population. It's something I also explained here 18 months ago, apparently to little avail.
The following charts illustrate the problem:
The first chart -- Not Seasonally Adjusted (NSA) -- shows us how many net jobs the economy really picked up or lost each month going back to January 2004. It tells us that 473,000 more people were working during February than were working during January.
The second chart -- Seasonally Adjusted (SA) -- reframes the actual results by adjusting them for seasonal trends like Christmas hiring and summer jobs. In this case, those machinations resulted in 36,000 jobs lost. There's nothing wrong with this exercise; it's a legitimate form of statistical smoothing designed to make month-to-month results more readily comparable. But it does not -- repeat, does not -- tell us what actually happened in America's factories, job sites, and offices in any given month, as the vast majority of media reports and political announcements would lead one to believe.