For the household survey types, the key number from the recent Employment Situation Summary should be the 62.4% employment-to-population rate which was unchanged. As the author of this post, I was wondering if Lawrence Kudlow might be elated that the only reason the unemployment rate fell to 5.2% was that the labor force participation rate fell from 66.0% to 65.8% (and no I neither predicted nor hoped for that 12/2005-b scenario).
It seems Mr. Kudlow has been busy trying to convince us that savings has risen as a result of Bush’s fiscal regime. Of course, the fact that the share of GDP going to consumption and government purchases has led the NRO pundits to abandon this measure and focus on the increase in nominal household net worth. But even by this measure, net worth at the end of 2004Q3 was lower in inflation-adjusted terms relative to where it was at the end of 1999.
It seems that Kudlow has outsourced his employment cheerleading to David Malpass who writes:
Job growth for January in the establishment survey came in at a weaker-than-expected 146,000, with the previous three months revised down by a total of 59,000 to an average 182,000 new payroll jobs per month. But this is not a poor result for this survey. Rather, it is fully consistent with an improving and relatively strong labor situation, continued rapid economic growth, and a durable, multi-year expansion. The establishment survey shows a record 132.6 million jobs currently, which tops the previous high reached in February 2001. The household survey – the Labor Department’s other, lesser-recognized employment measure that includes the self-employed – shows that jobs hit a record 140.3 million in November 2004, with January coming in at 140.2 million…Since the 2001 recession, the unemployment rate has fallen to 5.2 percent from 6.3 percent, indicating a sharp improvement in labor conditions and a return to relatively full employment.
The sharp reader might wonder about this decline in the reported household survey employment number (140.3 million to 140.2 million) but one should also the footnote that BLS puts in its household survey table:
Data affected by changes in population controls in January 2000, January 2003, January 2004, and January 2005.
OK, the NRO pundits do not recognize this footnote, but we should raise the discussion over the labor market above their stupidity and mendacity.