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Employment Report Reporting

Saturday, 11 January 2014 09:01

Some strange items got into the coverage of the December employment report. The Washington Post noted the weak job numbers and then told readers:

"The unemployment rate dropped to 6.7 percent, but mostly because many people gave up looking for work, possibly deterred by a combination of cold weather, the holiday season and the expiration of long-term unemployment benefits. (To qualify for the benefit, an applicant must be trying to find a job.)"

The data are always seasonally adjusted. This means that cold weather would not by itself affect the data unless the weather was extraordinarily cold for December in large parts of the country. This was not the case. Similarly, the holiday season occurs every year in December, this cannot explain more people dropping out of the labor force this year than in prior years.

The ending of benefits is a plausible explanation, but not for December. One million three hundred thousand people saw their benefits expire on January 1, but this should not have affected their job searching behavior in December. At the time, they did not even know that their benefits would necessarily expire since bills for renewal were still being debated in Congress.

The NYT article on the report had the strange comment:

"In the larger political picture, the December jobs report started the 2014 election year with a thud for President Obama, with half of Americans disapproving of the job he is doing and Democrats facing a tough “six-year itch” election. Since World War II the party in the White House has lost, on average, 29 seats in the House in its second midterm. Democrats were already struggling to recover from the Affordable Care Act’s disastrous rollout."

There will be 9 more jobs reports released between now and the November election. It is highly unlikely that any significant number of people's votes in that election will be significantly affected by the December jobs report.

It is striking that neither report noticed that the labor force participation rate for African American men fell to the lowest level on record in the December report.

Comments (5)Add Comment
written by Kat, January 11, 2014 9:39
I'm glad someone is calling out this ridiculous weather explanation.
Note to NYT: hard to believe, but there is a more important story than the political fallout of the jobs report. The fallout story might conceivably be important if you believe there is a world of difference between how Republicans govern and how Democrats govern.
written by EMichael, January 11, 2014 10:41
I see a big difference between the two, though not as large as I would like.

I suggest you take a look at just tax policies between the Bush and Obama administrations to see the difference.

I see the top marginal rate that was cut by 12% by Bush restored.

I see the tax on dividends cut by Bush increased by Obama. I also see additional taxes on investment income for those making more than $200,000 a year on investment income.

The estate tax is back.

Using the "they're all the same" meme is quitting.
weak counterpoint
written by alan, January 11, 2014 11:09
I saw the following in a NYtimes article:

“The debate will be further charged by these very important numbers, but the White House has a tough sell here,” said Representative Charlie Dent, Republican of Pennsylvania... “On the one hand they say the economy is getting better. On the other, they need emergency unemployment benefits. The two can’t coexist.”

Perhaps the NYtimes can find educated Republicans to provide a counterpoint the what the data is telling us. One can still need medicine even if one is felling better after the flu.
written by Mark Paul, January 11, 2014 12:10
The Post isn't just ignorant about seasonal adjustments. It also seems not to understand weather. According to this datahttp://wattsupwiththat.com/201...mber-2013/ December was warmer than normal in the heavily populated coasts, with the cold hitting mostly in the less populated Plains.
written by skeptonomist, January 11, 2014 12:16
The employment/population ratio for all men has dropped (cyclically) since 1950 (FRED: LNS12300001), so a new low for any specific subset is not surprising. The ratio for women (LNS12300002) was rising fairly steeply but appears to have been dropping since around 2000. It is the latter change which has dominated the overall ratio in the last 20 years.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.