October 3, 2004

Which Version of Jobs Data Do You Want

THE last big economic indicator of the election season - the employment data - is due on Friday.

The Wall Street forecast of 150,000 new payroll jobs for September is not as robust as the average monthly increase of 180,000 this year, but it is better than the average of about 104,000 over the last three months.

If the 150,000 figure is correct, it will mean that 1.84 million new jobs have been created since September 2003. That is a number you will hear from President Bush. Senator John Kerry is likely to emphasize that 2.65 million jobs were lost from the end of 2000 to September 2003. Even with the surge since then, the net loss is 816,000.

Some economists argue that Mr. Bush is not to blame for all the lost jobs because the economy was slowing before he took office. Others say he can't be credited for all the job creation, considering how much the Federal Reserve stimulated growth.

The argument becomes more complicated when you include the employment data from the current population survey, used to calculate the unemployment rate. It is based on 60,000 personal interviews. The payroll data is based on interviews with 160,000 employers and does not include agricultural workers or the self-employed.

Economists follow this survey because it is broader and less volatile. But it's hard for them to figure what to make of the much different job picture that the current population survey is presenting. This survey shows that there has been no net job loss during Mr. Bush's term; in fact, it says, 2.05 million jobs have been created.

Perhaps the true picture is somewhere in the middle, but neither Mr. Bush nor Mr. Kerry is likely to talk about that.

OH, MERCK! The plunge in Merck's stock last week - and the chance that the company's future earnings will be impaired - could move it to a new Wall Street pigeonhole.

Merck fell 27 percent on Thursday after announcing that it would stop selling its arthritis and pain medication Vioxx. Without a recovery in the stock, said Dennis Trittin, portfolio manager of United States stocks at the Russell Investment Group, Merck could move from a hybrid to a pure value stock.

In analyzing a stock, Russell calculates how much of it fits into growth and value categories. Based on the annual reassessment in June, Merck was 57 percent value, 43 percent growth.

Mr. Trittin said he could not say what will happen in next year's index recalculation. But after last week, he said, "Merck might end up as a 100 percent value stock."