The Unemployment numbers are out for January of 2011. Here's the headline: The economy created a net of 38,000 jobs during the month, more than 100,000 jobs less than the expected figure. Even so, unemployment fell to a flat 9.0% according to the Household survey. The swing between these two results is so large that it makes one wonder if someone is cooking the books. Sure, there can be differences since th enumbers come from two different surveys, but they should not be like this. A month with job growth of just 38,000 should have led to an increase in the unemployment rate, not a decrease. Indeed, there was an adjustment for the number of jobs created in November and December that was larger than the increase announced for January; in other words, with the adjustment, there are now fewer jobs than were announced at the end of December. Some in the media immediately started announcing that the difference was due to an increase in self employment. Are we to believe that January saw half a million new businesses formed? That is about as likely as saying that the numbers of unemployed fell because there were 350,000 alien abductions that removed workers from the work force. Was there such an enormous drop in the number of people seeking work that could explain the difference? Again, I doubt it.
the only reasonable conclusion is that somehow the two surveys came up with conflicting results due to some methodological or statistical anomaly. I, for one, plan to ignore the results until next month. The only other choise is to pick the one that fits with your own pre-existing view, always a dangerous move.
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