Moments ago, the government released the Employment report for April. It was presented as good news. After all, we were told, the economy created 165,000 and the experts had predicted only 150,000. Even better, the unemployment rate fell by 0.1%.
The truth is somewhat different than the hype. First, you need to realize that the number of jobs which is reported is the result of a poll. Actual jobs are not counted. It is a poll with a very large sample, to be sure, but it is a poll nevertheless. What that means is that a difference of 15,000 jobs is not cause for celebration. Sure, it is better that the results beat what the experts predicted by 15,000 rather than missing, but either way is unimportant. After all, why would these so called experts know the number of jobs? The reality is that the press is celebrating a comparison of poll results with the average educated guess of a bunch of experts.
Second, the unemployment rate fall does not indicate a major improvement in the prospects for employment of the army of unemployed who cover the country. Remember, five years ago, the collective wisdom of the very same experts of whom we just spoke was that the economy had to create at least 200,000 jobs each month just to absorb all the new folks entering the labor force. For three decades the percentage of Americans who were working kept rising. No one was predicting a major shift in that percentage. Still, there seems to be nothing like a major recession and a stalled recovery to discourage folks into dropping out of the labor force.
The employment report is important because it is a measure of human success, getting and holding a job. People relate to that. Nevertheless, these days, the monthly reports are becoming less and less relevant.
Let me hasten to add this. I am not saying that today's report is a bad one. You can hold the email. I am saying, however, that this is just another indicator of nothing much.
The truth is somewhat different than the hype. First, you need to realize that the number of jobs which is reported is the result of a poll. Actual jobs are not counted. It is a poll with a very large sample, to be sure, but it is a poll nevertheless. What that means is that a difference of 15,000 jobs is not cause for celebration. Sure, it is better that the results beat what the experts predicted by 15,000 rather than missing, but either way is unimportant. After all, why would these so called experts know the number of jobs? The reality is that the press is celebrating a comparison of poll results with the average educated guess of a bunch of experts.
Second, the unemployment rate fall does not indicate a major improvement in the prospects for employment of the army of unemployed who cover the country. Remember, five years ago, the collective wisdom of the very same experts of whom we just spoke was that the economy had to create at least 200,000 jobs each month just to absorb all the new folks entering the labor force. For three decades the percentage of Americans who were working kept rising. No one was predicting a major shift in that percentage. Still, there seems to be nothing like a major recession and a stalled recovery to discourage folks into dropping out of the labor force.
The employment report is important because it is a measure of human success, getting and holding a job. People relate to that. Nevertheless, these days, the monthly reports are becoming less and less relevant.
Let me hasten to add this. I am not saying that today's report is a bad one. You can hold the email. I am saying, however, that this is just another indicator of nothing much.
No comments:
Post a Comment