The Jobs Report: A Beginner’s Guide
The BLS released its monthly jobs report yesterday. The media frenzy buzzed all around just two numbers – 200,000 new jobs and an unemployment rate of 8.5%.
The national news media, shallow as it is, typically doesn’t read beyond sentence #1 of the jobs report. This month that sentence says:
Nonfarm payroll employment rose by 200,000 in December, and the unemployment rate, at 8.5 percent, continued to trend down, the U.S. Bureau of Labor Statistics reported today.
A skeletal, yet sadly above average, analysis is found in yesterday’s New York Times, “U.S. Economy Gains Steam as 200,000 Jobs Are Added“.
There is a lot more to the BLS report than what gets detailed by the NYT. Most of it is crucial to understanding the issue of job creation and is rarely reported on accurately.
This is an attempt to provide a beginner’s intro into understand this very data-rich report.
Where Does the Monthly Jobs Report Come From?
From their “Office of Publications & Special Studies”, the BLS allows email subscriptions to a weekly list of press releases and reports from the “Editor’s Desk”. (See above graphic where you can sign up)
All of the national news media worth their salt, and a certain wonkish individual who shall remain nameless, sign up for that email.
The email just contains a link that takes you to the above web page.
Regular as clockwork, on the first Friday of every month it links to the monthly jobs report.
A Cornucopia of Fascinating Stuff — An Aside
The BLS weekly publications web page list contains other things, too; it is a veritable holiday platter piled high with ever-changing, truly entertaining publications paid for by your hard earned tax dollars!
For example, my personal favorite from the “Editor’s Desk” this week is:
“Workplace Homicides in retail trade, 2003-2008“.
From it we learn that 22% of all homicides were at gasoline stations. The safest workplaces were “nonstore retailers” with only 1.4% of homicides and the most dangerous are “food and beverage” retailers (taverns?) with 41% of all homicides.
I feel safer knowing that already.
Oh… wait… hold on! Things have changed since 2008. Maybe gas stations are the safest places now.
But I digress.
The Monthly Jobs Report in General
The BLS calls it “The Employment Situation” report, but regular folks know it as the monthly jobs report.
Unless you have an aversion to it, always look at the PDF version. It is WAY cooler. It has pretty graphs and tons more information than the HTML version. The HTML is totally boring, and sorta deceptive.
The Monthly Jobs Report For This Month
The problem with making a big deal about the 200,000 and 8.5% in the first sentence is they are only PRELIMINARY numbers!
They will probably change next month, so it isn’t a good idea to attach much significance to them now.
For example, last month the Jobs Report PRELIMINARY unemployment figures claimed the unemployment rate had dropped from 9.0% to 8.6%.
Everyone and their mother in the national press wildly speculated the reason for the huge drop was because job seekers had simply giving up looking and had dropped out of the workforce.
That speculation actually contributed to a downturn in the stock market last month.
If they had just looked further down the report they would have seen that was simply not true. The BLS report data further down clearly shows that job seekers dropping out was not the cause.
As it turned out, the 9.0% and 8.6% were a reporting anomaly resulting from preliminary data!
This month’s more reliable, corrected unemployment figures shows exactly the smooth decline in unemployment you’d expect in a recovering economy.
But the news media aren’t the sharpest knives in the drawer and do stuff like that with those numbers every month.
Today’s lesson… never make grandiose generalizations based on preliminary data!
Where Did the 200,000 Job Count Come From?
Always be suspicious of round numbers – like 200,000 – coming from the government.
That number comes from not one, but TWO PRELIMINARY numbers… November’s and December’s!
Scan way, way down the PDF report version to a big table labeled, “Table B-1. Employees on nonfarm payrolls by Industry sector and selected Industry detail”. That is where the exact 200,000 comes from.
Doesn’t that title make you positively giddy with excitement to learn more? Btw, Table B-1 isn’t even in the HTML version of the report.
Its a big table, but fortunately the only part that matters is the first row. 🙂
Looking there you see on the far right that both November and December preliminary job tallies are suspiciously rounded off to the nearest 100,000!
Anyone think that 200,000 jump is solid, now? (Didn’t think so)
Stay tuned next month for the exciting readjustment to this month’s job totals!
The BLS really does keep a tremendous amount of highly useful information online.
That data can answer a lot of fundamental questions about job creation. But the data usually gets distorted by politicians and fictionalized on TV and in newspapers.
Obviously, based on how the media only glosses over sentence one jobs report preliminary data, and little more, then you can’t depend on it for anything.
If you want to get to the truth you have to dig out the facts yourself.
This first article is barely an introduction to BLS data. You are encouraged to play with, explore and scope out stuff that the BLS keeps online.
In upcoming articles I will use BLS data to explain why job creation is the #1 issue in the 2012 elections… using very, VERY specific numbers.
I’ll cross compare the job creation records of Presidents Bill Clinton, George W. Bush and Barack Obama.
You’ll find them most enlightening and you’ll even learn how to do the fact checking for yourself.