New Economic Numbers

| August 6, 2004 | Reply

Or, “How the Government Blizzard of Statistics Can Make You Drool Like You Just Took a Baseball Bat To The Left Temple”.

The Bureau of Labor Statistics has released the July employment numbers, and they don’t look good. But then again, they do. Let’s see if there’s some way to tangle some sense out of this.

THE EMPLOYMENT SITUATION: JULY 2004

Nonfarm employment was little changed (+32,000) in July, and the unemployment
rate was essentially unchanged at 5.5 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Employment levels in most of the major industry sectors were little changed over the month.

Unemployment (Household Survey Data)

Both the number of unemployed persons, 8.2 million, and the unemployment rate, 5.5 percent, were essentially unchanged in July. The unemployment rate has shown little movement since December 2003. The jobless rates for the major worker groups–adult men (4.9 percent), adult women (4.9 percent), teenagers
(17.6 percent), whites (4.8 percent), blacks (10.9 percent), and Hispanics or Latinos (6.8 percent)–also were little changed over the month. The unemployment rate for Asians was 4.3 percent in July, not seasonally adjusted. (See tables A-1, A-2, and A-3.)

Total Employment and the Labor Force (Household Survey Data)

Total employment rose by 629,000 to 139.7 million in July, and the employment population ratio–the proportion of the population age 16 and over with jobs–increased to 62.5 percent. The civilian labor force also increased over the month, rising by 577,000 to 147.9 million, and the labor force participa-
tion rate rose to 66.2 percent. (See table A-1.)

First, a caveat. I’m not an economist. Numbers make me feel dizzy and give me the desire to lay down and drink Scotch for a couple hours. Given that, though let me see if I have this right. The economy added 32,000 jobs – according the the non-farm (payroll) survey, but 629,000 overall. Does this mean that American farms added 597,000 jobs?

Not necessarily. The first survey – the one with the small number – is only a survey of employers’ payrolls. That’s the number of jobs added where one person is paying another person to work for them: restaurants, movie theaters, WalMarts, etc. The second number – the household survey – is a survey of how many people are getting paid to do some work. That includes not only “farm” jobs (a throwback to the 1800s or earlier in the US) but also people who are working as freelancers and who have started their own businesses.

Considering that, these numbers don’t look quite as bad as first indicated. Of course, not being an economy stud, I could well be wrong. I rely on you folks who might have a different view of it to correct me on the factual part of things.

Category: General

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