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.