The Employment Situation Report for August 2006 showed employment rising by only 128,000. The unemployment rate fell to 4.7% – not because the labor force participation rate fell (it was unchanged) – but because the employment to population ratio rose from 63.0% to 63.1%. You see – the household survey reported a 250,000 increase in employment. I wonder what the rightwing spin will be this month?
Update: Since the Corner Kids over at National Review are too busy advocating World War III with the Muslim world, I figured the only real spinning would be coming from the White House:
Since August 2003, our economy has created more than 5.7 million jobs, and manufacturing production has risen 5.6 percent in the last year. Our economic expansion is lifting the lives of millions of our citizens, and we will continue to work toward developing sound economic polices that keep our economy moving forward and create more jobs for American workers.
I’m impressed that the President chose to stick with the payroll survey. Of course, employment has increased by only 3 million since he took office in January 2001.
Update II: Floyd Norris sort of falls for the unemployment is falling spin:
NEARLY five years after the end of the 2001 recession in the United States, this recovery can be painted using employment statistics as the worst – or one of the best – of the aftermaths of the 10 post-World War II recessions. On the good side, the unemployment rate, at 5.5 percent in November 2001, was down to 4.7 percent in August, the Labor Department reported yesterday. In similar periods after ends of the nine previous downturns, the unemployment rate was that low only once. The low unemployment rate has come about despite a slow rate of job creation … To some extent, the divergent indicators reflect the fact that the numbers come from two surveys with different methodologies and, in recent years, differing trends. The jobs figure comes from a Labor Department survey of establishments and lately it has tended to produce gloomier numbers than the other survey the department performs, in which households are asked which members have jobs.
Brad DeLong compliments Mr. Norris on this article as he takes care of the couple of problems:
the most obvious explanation is that employment is low because the labor market is weak, and taht labor force participation is y because half a decade of a weak labor market has convinced a lot of people that they have better things to do–go to school, raise a kid, retire early, et cetera–than look for a lousy job. Norris gets two things wrong, however. He gets the lead wrong: I haven’t heard anybody–not even White House spinmaasters–paint the emploment recovery as “one of the best” since World War II. That doesn’t pass the laugh test. And he overstates the role played by the divergence between the household and establishment surveys. They don’t paint all that different pictures.
OK, Brad has a few spelling errors, but he captures my thoughts perfectly.