Crazy Eddie on the Jobs Report: 2 Out of 3 Ain’t Bad

Dana Perino and Edward Lazear were sent out by the White House to tell the press that there was more good news in the jobs report than bad news:

The jobs report contains a variety of information in it, and one of the pieces of information, and only one of the pieces is the jobs number. In addition to that, there are also numbers on unemployment, wage growth and weekly hours. And it’s important to recognize that those numbers were actually good numbers; the unemployment rate actually went down; the wages continued to grow; and weekly hours stayed stable. All of those things are strong indicators that the economy is continuing to move.

We noted that the dip in the unemployment rate masks the fact that the household survey showed an even more significant drop in employment (see here and here). Menzie Chinn has some impressive charts that show that both the payroll and household surveys show employment falling over the past few months.

So we are to the claim that wages are rising. Nominal wages are indeed rising but at a slower rate than are consumer prices. Real wages have been falling and it turns out that the net change in the real wage rate for production and nonsupervisory workers over the past five years is zero. Edward Lazear gets this point but it would seem that the White House thinks it is appropriate to send these two out to just flat out lie to the press. OK, we are used to the fact that Bush’s press secretary lies to the press on a daily basis, but the Chairman of the Council of Economic Advisers should avoid this behavior.

Footnote: If you are wondering about weekly hours, it did stay stable at 33.7 hours. This compares to 34.2 hours as of January 2001. At worse since then, it bottomed at 33.6 hours. So why Crazy Eddie even bothered to mention this as great news beats me.