Ups & Downs of Job Numbers
Terry H. Schwadron
Feb. 6, 2022
Though the headlines were about the big number of jobs added in January — a month in which Omicron was believed to be sidelining workers in its rolling wave across the country — the real takeaway seemed to have been the year-long rise in jobs altogether.
Once again, announcement that a half-million new jobs had been added, came as a surprise to the usual survey of U.S. economists who insist on predicting the outcome.
This time it was a positive surprise.
Moreover, the Bureau of Labor Statistics revised its “disappointing” report from last month to show 150% more jobs had been added than reported — again flying in the face of what all the experts had predicted and criticized.
Wait a minute. All we’ve been hearing lately is defensive Democrats praising the same economy that Republicans are constantly attacking as marked by high prices and stalled progress. Maybe what we should learn this month is that Biden didn’t just become an economic genius and his Republican opponents might not be just right about the criticism.
While economists warned that measurement issues and other quirks made the data difficult to interpret, “the overarching message of the report was one of resilience in the face of a resurgent pandemic,” summarized The New York Times.
As government reports go, this one was almost uniformly good news. By and large, job additions beat Covid effects, wages showed measurable increases, new jobs came from leisure industries, retail and manufacturing alike, and more people were said to be looking for work again.
This report doesn’t measure inflation or prices, and those remain the more popularized standby points of public perception of the economy.
Economist Paul Krugman noted that media coverage from all sides, but particular from the right-leaning media, have far emphasized high prices over job growth and other more positive signs of the economy. Somehow, what happens in the economy is dwarfed by what people perceive is happening. As usual, Americans choose to follow emotion rather than fact.
From the political point of view, Democrats are insistent that good news for jobs when tied to recent reports of a 6 percent national growth rate is evidence that the economy is booming. Republicans tend to dwell on how Joe Biden’s policies are failing the nation’s economy, fueling high gas prices and still too dependent on international commerce.
Mostly, these results should say both that managing a national economy is a lot more complex than the slogans support and that there are serious limits on what the White House can do about what happens in a marketplace.
To me, what proved most unsettling was neither good news nor bad: It was unsettling to discover that these government measures that so seem to control stock market investments, consumer confidence, whether companies and jobs continue to grow and pay better wages can be so wrong.
This January report was a reminder that the monthly reports are too volatile to tell a complete story. These measures really should only be consumed in the context of several months’ worth of trend data to have any real meaning. How could our reporting systems in place every month be off by 300,000 jobs, from 199,000 to 510,000? Why do we even pay attention to them until they have been corrected in succeeding reporting periods?
And then ask yourself why should we listen to politicians blaming this president or any over economic policies with totally unreliable information?
BLS explains its processes as part of the published report, but it is akin to inviting phone users to check the box on the legal language at the bottom of complicated web forms. We want the bottom line.
Follow the Trends
The report had plenty of data points worth perusing, but overall, what is important is the direction that various factors follow.
The unemployment rate now hit 4 percent but reflected little monthly change but a significant improvement over two years ago. Roughly the same percentages of adults and teens are unemployed, and racial or gender comparisons showed little change. We know many women have left their jobs during the pandemic.
The number of persons jobless less than 5 weeks increased to 2.4 million and accounted for 37.0 percent of all unemployed, while long-term unemployed numbers declined, though to a point still higher than in 2020.
Telework is still rising, and millions said they couldn’t work last month because of Covid.
The report tracks numbers of part-time workers, but not their difficulties in getting regularly scheduled hours.
Jobs in leisure, transportation and warehousing, retail are rising, while those working for local government — which would include schools — still lag pre-Covid numbers. Areas including construction and financial work stayed about the same.
It is in the reporting and interpretation of all these numbers that things are being missed or misdirected. The insistence on news that focuses on failures rather than ordinary positive growth has combined with an ever-present partisan push to see the current incumbent in a highly negative light.
Job reports are useful in telling us what we are doing, but the overemphasis on must-have takeaways that are politically good or evil is scarring the listening process.