Well, the monthly unemployment figures for November were released yesterday and the usual confusion and negativity dominated the reporting. The news was mixed, most pundits said, as the economy added only 120,000 jobs, yet the unemployment rate fell to 8.6%. How could the rate fall by .4% to its lowest level in 2.5 years with so few jobs created, they mused. A riddle to be sure.
To the pundits and so-called experts out there I have one suggestion- please take a statistics class. And do a little research. Okay, so that's two suggestions, but who's counting.
The monthly employment figures are among the most spurious statistics published by the government. Each month employers, most of whom are small, call the Department of Labor (DOL) to report the change in employment at their firms. This approach is fraught with problems, from inaccurate reporting to calls never made. Because of these issues, they revisit the previous month data in subsequent calls to the DOL. If there is a change, the previous numbers are revised.
Herein lies the answer to the aforementioned riddle.
The total of these revisions in the employment data from June to November is an increase of 242,000 jobs more than originally reported. Interestingly, these numbers are never given the light of day in the reporting. September for example, saw an increase in 117,000 jobs when originally reported. By yesterday's report, the September number was revised up to 210,000. Said another way, the original report was too low by 80%. Wow. Mystery solved.
Instead of doing a little research and re-crunching the statistics, the pundits explain the mystery away by saying that hundreds of thousands of people simply got discouraged and stopped looking for work. This is a much juicier, negative story, even if it is not true. I never understood how all those people simply stopped looking for work. Did they also stop looking for food?
This would be amusing if there was not so much at-stakeness in the number. Wall Street watches the number closely and lots of people lose real money on fake numbers.
I encourage the financial reporters out there to do a little more homework and report the employment data accurately. Sure it will not be as titillating as the ongoing bad news, but it has the distinct advantage of being the truth. Now that would be a welcome change.
Matthew Angello is the Founder and Principal of Bright Tree Consulting Group, LLC and a former board-level executive in Fortune 500 companies. He offers highly personalized and effective coaching for individuals seeking to unleash their potential, move their performance to the next level and prepare for future challenges. Visit our website to learn about our services and enjoy our free downloads- http://www.brighttreecg.com.
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Economics Article FeedFind More ArticlesSearchSimilar ArticlesTo Grow Out Of UnemploymentFactors That Raise Unemployment RatesUnemployment Rates Have Steadily Risen From July 07 to July 08!How Can You Tackle Youth Unemployment Through Youth Led Solutions?10.2 Percent? Would the Real Unemployment Rate Please Stand UpManaging Unemployment Insurance Tax Liability and Lowering OverheadThe Economic Story Behind the StatisticsHow to Win Political Debates With Data VisualizationEconomic Data That Influence the Stock MarketEconomic Recession Statistics - Four Key Indicators of Economic HealthRecent ArticlesHow To Solve The Homeless SituationProgressivism Isn't Progress, VIIIHow Secure Is Your "Secure" Job?A True Comparison Of Increasing Debt Between Bush And Obama AdministrationsHow To Compete With ChinaWould Einstein Think Us Insane?What Will Happen If Greece Defaults?A Cluster of (Minor) ErrorsThe US Recovery Is Producing SurprisesA Sigh Of Relief For The Economic Status Of The USSubmitted On December 03, 2011. Viewed 5 times. Word count: 405.MLA Style Citation:Angello, Matt".".3 Dec. 2011EzineArticles.com.26 Jan. 2012
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