Scarborough: Something’s awfully odd about this job report

posted at 10:41 am on October 5, 2012 by Ed Morrissey

Yes, there is — but it may not be what people think it is, however.  Joe Scarborough and Willie Geist both express skepticism over the “major tickdown to 7.8 percent” in the unemployment rate from the addition of only 114,000 jobs — which isn’t enough to keep up with population growth.  What happened?  Instead of focusing on that point, Mark Halperin instead points to a tweet from Jack Welch in order to marginalize the question:

Here’s the tweet from Welch:

That’s been retweeted over 1500 times so far, which demonstrates that (a) Welch has a lot of followers on Twitter — over 1.3 million — and (b) more than a few people are puzzled about this jobs report.  Scarborough and Geist are right to express skepticism, but it doesn’t have to be a conspiracy theory to say that the numbers don’t make sense.  CNBC’s senior economics reporter said the same thing in his analysis this morning, too.  If the BLS wanted to tweak the numbers to make Obama look good, though, they would have come up with a better number than +114K overall.

What is the issue, then?  Kevin Hassett reminds us at The Corner that BLS uses two surveys, the Household survey and the Establishments survey, and the +873K number comes from the former while the +114K number comes from the latter.  The media usually reminds readers/viewers that the Household survey is considered less reliable than the Establishments survey … at least during Republican administrations:

Today’s jobs report is a classic. The report, of course, reveals the results of two surveys, one of households, one of establishments. The professional economists and the press usually emphasize the establishment survey because it is viewed as less volatile. The establishment survey was terrible. The 114,000 number of jobs created on net in September is well below the average for this year (146,000) and the average for last year (153,000). This is wholly consistent with the story that the economy is decelerating sharply as we head into the fall. …

Back when President Bush presided over a jobless recovery, the household survey tended to show better news. At the time, every media organization carefully emphasized the establishment numbers, and warned that the household numbers are suspect. That, of course, is what happens when a Republican is in office. For President Obama, you can expect a household survey lovefest. The AP story that went up at 8:33, of course, emphasized the household survey, even adding, “The decline could help Obama, who is coming off a disappointing debate against Mitt Romney.” Get ready for more of the same.

Keep an eye on the U-6 measure of unemployment and underemployment, as Chris Cuomo insisted on Twitter this morning. That’s not budging from the 14%-15% range in which it has been for the last three-plus years.

Update: Jim Pethokoukis notes that one doesn’t need a conspiracy theory to show why these numbers don’t work:

Be sure to read his post.

Update II:  Here’s more from RDQ Economics, courtesy of another Jim Pethokoukis post:

This report is a tale of two labor markets.  The establishment survey (payrolls) painted a picture of moderately growing employment over the last three months but at a marginally slower pace than over the last year.  At this pace of job creation, the unemployment rate should be barely drifting lower given underlying demographic trends.  In contrast, the household survey painted a picture of a sharply falling unemployment rate—down 1.2% points over the last 12 months. Such a rapid decline in the unemployment rate would be consistent with 4%–5% real economic growth historically but much of the decline is accounted for by people dropping out of the labor force (over the last year the employment-population ratio has risen to only 58.7% from 58.4%).  We believe part of the drop in the unemployment rate over the last two months is a statistical quirk (the household data show an increase in employment of 873,000 in September, which is completely implausible and likely a result of sampling volatility).  Moreover, declining labor force participation over the last year (resulting in 1.1 million people disappearing from the labor force) accounts for much of the rest of the decline.  With this report, the ISMs, and vehicle sales, the September economy is off to a better-than-expected start but nowhere near as good as suggested by the decline in the unemployment rate.

This is why it’s better to keep an eye on U-6; it has less inherent volatility.


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Because Ed always has to explain things in the context of “being fair”.

Bluray on October 5, 2012 at 11:21 AM

You can go get your fix at Fox…they’re running with the conspiracy angle.
Are the now running headlines with leading rhetorical questions?
Yes, the are.
(Bias Alert!)

verbaluce on October 5, 2012 at 1:23 PM

The 7.8% rate is a result of 873,000 jobs added in September.

Bernie Madoff is running the BLS now.

faraway on October 5, 2012 at 1:23 PM

(Bias Alert!)

verbaluce on October 5, 2012 at 1:23 PM

Excuse me, your pompousness.But, you don’t have to sound an alert. We already know you’re biased.

kingsjester on October 5, 2012 at 1:25 PM

backfire?

or is it too late?

cmsinaz on October 5, 2012 at 1:27 PM

cmsinaz on October 5, 2012 at 1:27 PM

Nobody’s buying it, in Realityville.

kingsjester on October 5, 2012 at 1:28 PM

People vote on their own experiences. The truth is, people still can’t find jobs. I know of a few people that want jobs and there are none. Just because a report says unemployment went down doesn’t mean people will believe it.

mrscullen on October 5, 2012 at 11:34 AM

I agree.

INC on October 5, 2012 at 1:28 PM

You can go get your fix at Fox…they’re running with the conspiracy angle.
Are the now running headlines with leading rhetorical questions?
Yes, the are.
(Bias Alert!)

verbaluce on October 5, 2012 at 1:23 PM

So is The Hill, CNBC, MSDNC and CNN Money with a great big geadline reading “Unbelievable Job Numbers,” but the comments sections make it very clear that no one is buying the lie.

And they knew it, which is why they trotted out Hilda Solis this morning.

It’s a bad week for socialists.

dogsoldier on October 5, 2012 at 1:29 PM

Too bad this won’t last. It might have if the jobs numbers had been poor.

gumbyandpokey on October 5, 2012 at 1:13 PM

Suspicion about the federal government’s September jobs report has fallen on Secretary of Labor Hilda Solis, who appeared on CNBC this morning and defended the numbers from the Bureau of Labor Statistics (BLS), claiming–falsely–that upward revisions of 86,000 jobs were from the private sector. In fact, the new number is entirely accounted for by upwards revisions to state and federal government payrolls.

INC on October 5, 2012 at 1:29 PM

Can someone explain where the 600,000+ new jobs came from?…the explanation from CNBC and Solis did not make any sense…I’m so confused.

tkyang99 on October 5, 2012 at 1:30 PM

Can someone explain where the 600,000+ new jobs came from?…the explanation from CNBC and Solis did not make any sense…I’m so confused.

tkyang99 on October 5, 2012 at 1:30 PM

873,000 new jobs added per the household survey (they call folks at home)

faraway on October 5, 2012 at 1:32 PM

tkyang99 on October 5, 2012 at 1:30 PM

From the Breitbart link in my 1:29 comment:

In addition, the BLS reported a large rise in the number of part-time jobs, adding 600,000 jobs to the total–a dramatic increase of 7.5%, not explained by any other economic indicators–and raising questions about whether the government had changed the way it counted part-time workers.

INC on October 5, 2012 at 1:33 PM

link to 873,000 jobs added

far right, 4th row

faraway on October 5, 2012 at 1:34 PM

Too bad this won’t last. It might have if the jobs numbers had been poor.

gumbyandpokey on October 5, 2012 at 1:13 PM

http://www.shadowstats.com/

He doesn’t have an analysis up yet of today’s stats, but I will let you know.

August Unemployment: 8.1% (U.3), 14.7% (U.6), 22.8% (ShadowStats.com)

Have you ever wondered why the CPI, GDP and employment numbers run counter to your personal and business experiences? The problem lies in biased and often-manipulated government reporting.

Primers on Government Economic Reports What you’ve suspected but were afraid to ask. The story behind unemployment, the Federal Deficit, CPI, GDP.

INC on October 5, 2012 at 1:35 PM

Swift Transportation wants to hire 5,000 drivers by the end of 2012.

They must see an uptick in goods being haul with a Romney administration.

davidk on October 5, 2012 at 1:38 PM

Swift Transportation wants to hire 5,000 drivers by the end of 2012.

davidk on October 5, 2012 at 1:38 PM

That’s just to move the Obamas out of DC. Lots of Nobel prizes, Hope and Change shirts, and such

faraway on October 5, 2012 at 1:40 PM

gumbyandpokey,

I don’t believe for a minute that you’re going to vote for Romney. You haven’t been subtle with your adulation of Obama and your trumpeting of job numbers.

INC on October 5, 2012 at 1:41 PM

So, if 600,000 jobs were added, why didn’t they just SAY 600,000 jobs were added? Cuz that’s how they computed the 7.8% unemployment rate right?

So why publicize the 114,000 new jobs number at all? Why not just stick with the household survey?

It just seems so illogical and arbitrary. Makes no sense at all.

tkyang99 on October 5, 2012 at 1:41 PM

A pool on what the next jobs report will say, right before election day? 7.7%? 7.6?

J.E. Dyer on October 5, 2012 at 12:10 PM

I had said 7.7% for October’s numbers. It’s time ot revise it to 7.2% so Teh SCOAMF can say he is better than Bush (note; the December 2008 U-3 rate was 7.3%)

Steve Eggleston on October 5, 2012 at 1:47 PM

I think people are missing the point of “the President has to have below 8% unemployment to get reelected.” It is not a magic number that if it is printed in every newspaper, put on every billboard and emailed to every email address that people will look at it and disregard that they can’t find a job, or their husband can’t find a job, or their kids are living in their basement because they can’t find a job either.

The point of having less than 8% unemployment is that 92% of the people who want to work are working. If the real unemployment is 12% or 15% or 20%, then the officially pronounced 7.8% will probably just piss off the ones who have earnestly been looking and can’t find anything.

The measurement matters, but only because it measures something. Lying about the measurement makes headlines, but the thing being measured is what makes the difference in the vote, not the lie.

cptacek on October 5, 2012 at 1:54 PM

Gallup today:

October 5, 2012
The Payroll to Population employment rate, as measured by Gallup, was 45.1% for the month of September, a slight decline from 45.3% in August

http://www.gallup.com/poll/157892/payroll-population-rate-september.aspx

strictnein on October 5, 2012 at 12:59 PM

Which would, as it is not seasonally-adjusted, support perhaps the same 0.04-point drop in the unemployment rate that happened last year.

Steve Eggleston on October 5, 2012 at 1:54 PM

I think people are missing the point of “the President has to have below 8% unemployment to get reelected.” It is not a magic number that if it is printed in every newspaper, put on every billboard and emailed to every email address that people will look at it and disregard that they can’t find a job, or their husband can’t find a job, or their kids are living in their basement because they can’t find a job either.

The point of having less than 8% unemployment is that 92% of the people who want to work are working. If the real unemployment is 12% or 15% or 20%, then the officially pronounced 7.8% will probably just piss off the ones who have earnestly been looking and can’t find anything.

The measurement matters, but only because it measures something. Lying about the measurement makes headlines, but the thing being measured is what makes the difference in the vote, not the lie.

cptacek on October 5, 2012 at 1:54 PM

You forgot about the 6,727,000 (seasonally-adjusted, or if you prefer, 6,427,000 on an unadjusted basis) who want a job now but, because they hadn’t looked for work between mid-August and mid-September, aren’t counted as “unemployed”. Add that to those who are officially “unemployed” and you’re talking about 11.6% of those who want a job not having a job. Since the “want a job now” number has been published starting in January 1994, that 11.6% is higher than any point before March 2009, a mere 4 months before the recession “ended”.

Steve Eggleston on October 5, 2012 at 2:00 PM

dogsoldier on October 5, 2012 at 1:29 PM

You’re overreaching here.
The story you’re reading isn’t that #s aren’t real…it’s that there’s a bunch of Romney advocates/Obama critics saying they aren’t real.
Look (as Obama would say)…
Anyone trying to claim the debate the other night wasn’t good for Romney has no credibility.
And anyone saying these #s aren’t good for Obama also has no credibility.

verbaluce on October 5, 2012 at 2:12 PM

it doesn’t have to be a conspiracy theory to say that the numbers don’t make sense.

It doesn’t require a conspiracy.

All it takes is the pressure of an imminent reelection bid and one or more of the following:

a) a common goal and some compounded bias in massaging and interpreting the data,
b) a little creative cherry picking or discarding of data,
c) a lack of curiosity in investigating and explaining conflicting internal numbers.

We’ve already seen ‘c’ in polls that have D+10 samples.

It can be as simple as stopping the analysis once someone has a number they like and thinks they can reasonably defend in a preelection court of public opinion for at least a month. If errors are found after the election, will it matter? Will any heads roll? I doubt it.

In this case that only 114,000 jobs were created seems out of sync with a 0.3% drop. Doing just a rough analysis, 114,000 is 0.3% of 38,000,000. The work force is much larger than that. But that 7.8% number looked so good to some people, why bother investigating further.

farsighted on October 5, 2012 at 2:14 PM

You forgot about the 6,727,000 (seasonally-adjusted, or if you prefer, 6,427,000 on an unadjusted basis) who want a job now but, because they hadn’t looked for work between mid-August and mid-September, aren’t counted as “unemployed”. Add that to those who are officially “unemployed” and you’re talking about 11.6% of those who want a job not having a job. Since the “want a job now” number has been published starting in January 1994, that 11.6% is higher than any point before March 2009, a mere 4 months before the recession “ended”.

Steve Eggleston on October 5, 2012 at 2:00 PM

I don’t think I forgot that. I think that was my point?

cptacek on October 5, 2012 at 2:16 PM

If the addition of 114,000 jobs really caused a 0.3% decrease (from 8.1% to 7.8%) in the unemployment rate, that would mean that the total labor force in the United States is 114,000 / 0.003 = 38 million. In a nation of 310 million inhabitants, only 38 million (12.3%) of them are in the labor force?

As former President George W. Bush would have said, this is fuzzy math, or fudged figures.

Steve Z on October 5, 2012 at 10:52 AM

You beat me to it. GMTA.

farsighted on October 5, 2012 at 2:16 PM

The Fool in his Glory

Schadenfreude on October 5, 2012 at 2:26 PM

Teh heh

Schadenfreude on October 5, 2012 at 2:27 PM

Anyone trying to claim the debate the other night wasn’t good for Romney has no credibility.
And anyone saying these #s aren’t good for Obama also has no credibility.

verbaluce on October 5, 2012 at 2:12 PM

A great lie isn’t good for Obama. If there was a shred of reality behind it, this would be terrific news. Some like yourself will just take this at face value, and trumpet it as great news.

FWIW I’d react the same way regardless of who occupied the White House.

This report won’t help Obama very much, but the story about the folks disbelieving the report WILL hurt him.

dogsoldier on October 5, 2012 at 2:39 PM

At least two of the economists at the BLS have donated to Obama’s reelection campaign. Pardon me if this has already been posted, but I haven’t made it through the thread.

totherightofthem on October 5, 2012 at 2:41 PM

I don’t think I forgot that. I think that was my point?

cptacek on October 5, 2012 at 2:16 PM

Actually, you did. It is not a mere 7.8% of those who want to work not working, but 11.6% of those who want to work not working. Between late 1994 and November 2008, that number was never in double digits.

Meanwhile, the ranks of those who don’t want to work anymore are swelling. Only 76.4% of those between 16 and 64 who are not disabled, and 32.5% of those between 16 and 64 who are disabled, were either working in mid-September or had searched for work between mid-August and mid-September (on a seasonally-unadjusted basis). In both cases, that is the worst September since the current version of Table A-6 was created in July 2008.

Steve Eggleston on October 5, 2012 at 2:42 PM

So 600,000+ part time jobs magically drop out of the sky and no one is questioning it…unbelievable.

tkyang99 on October 5, 2012 at 3:09 PM

gumbyandpokey, there is a more nefarious reason he won that Senate seat.

kingsjester on October 5, 2012 at 1:10 PM

KJ: That picture! So cute! Too bad it’s far cuter than the grown up version. Not too shabby of a blog post, either, btw. ;)

totherightofthem on October 5, 2012 at 3:12 PM

I just wonder if it was Axelrod or Jarret that made them revise it down from the 8.2 that was released yesterday.

LegendHasIt on October 5, 2012 at 3:14 PM

873,000 new jobs added per the household survey (they call folks at home)

faraway on October 5, 2012 at 1:32 PM

Which begs a rather simplistic question: If they are home to take the calls, just how employed can they be? Are we counting home-based, self-employment-you know, make thousands from your kitchen table! while you sleep!-as jobs?

totherightofthem on October 5, 2012 at 3:16 PM

Actually, you did. It is not a mere 7.8% of those who want to work not working, but 11.6% of those who want to work not working. Between late 1994 and November 2008, that number was never in double digits.

Meanwhile, the ranks of those who don’t want to work anymore are swelling. Only 76.4% of those between 16 and 64 who are not disabled, and 32.5% of those between 16 and 64 who are disabled, were either working in mid-September or had searched for work between mid-August and mid-September (on a seasonally-unadjusted basis). In both cases, that is the worst September since the current version of Table A-6 was created in July 2008.

Steve Eggleston on October 5, 2012 at 2:42 PM

I know that 7.8% is a lie, or at least it isn’t measuring the state of the economy we are supposed to believe it is.

I am trying to say that the underlying reality on the ground is what matters, not the number in the newspaper.

cptacek on October 5, 2012 at 3:19 PM

I know that 7.8% is a lie, or at least it isn’t measuring the state of the economy we are supposed to believe it is.

I am trying to say that the underlying reality on the ground is what matters, not the number in the newspaper.

cptacek on October 5, 2012 at 3:19 PM

Good to see we’re on the same side and now have the same numbers.

Steve Eggleston on October 5, 2012 at 3:26 PM

totherightofthem on October 5, 2012 at 3:12 PM

Thankyaverymuch!

kingsjester on October 5, 2012 at 3:30 PM

YOU’RE FIRED JOE

HOW DARE YOU QUESTION THIS OBAMA LOVING NUMBER

Redford on October 5, 2012 at 3:41 PM

Q: Are these numbers seasonally-adjusted?

A: Yes, they were adjusted for Election season.

drunyan8315 on October 5, 2012 at 3:41 PM

Scarborough and Geist are right to express skepticism, but it doesn’t have to be a conspiracy theory to say that the numbers don’t make sense.

Really? At this point absolutely nothing is certain and Scarborough and Geist are even leaning towards collusion of government/political entities that resulted in their ‘skepticism’ — and you’re giving the as yet unnamed but clearly intimated government/political entities — cover ?

Here’s another crystal clear option that was — and still is — available to you, ED, and it still doesn’t even violate your ostensible sensibilities and — current leanings perhaps?…

“Scarborough and Geist are right to express skepticism, but it doesn’t have to [NOT] be a conspiracy theory to say that the numbers don’t make sense.”

What is it with the HotGas pundits and their insatiable desire to cover miscreant POTUS Obama and the miscreant Left (ie: opponents) — even in cases such as this where nothing is certain — yet still there’s the cover courtesy of HotAir.com despite the fact that the track record of lies and deceit and self-serving collusion by this administration is long as your arm and plain to see and now is the right time for them to play their hand with a stacked deck since soooo many people are hung up on the jobs numbers — and *shocker* lookey there — miraculously unemployment is suddenly under 8% — in OCTOBER — despite the fact that the jobs numbers don’t add up and so far all anyone can offer is *maybe’s* and *could be’s* to explain it… ?

HotAir.com — Guaranteed Soft & Squishy — Or Your Money Back™

Un-freakin-real.

FlatFoot on October 5, 2012 at 3:54 PM

re- “new jobs added per the household”

iirc, didn’t we just get a wholesale redefinition of what qualifies as ‘work’ for welfare purposes?
Seems like flushing your toilet was on that list somewhere.

/.

CaveatEmpty on October 5, 2012 at 3:55 PM

Can you just imagine what the commies would’ve screamed if this sudden finding of 800,000+ jobs in a month happened in October of 2008?
LOL

Gotta love how the commies are always seeming to “find” things helpful to them JUST WHEN THEY NEED THEM MOST…like bags of uncounted democrat ballots found in the trunk of a car late on election night that just happened to swing a Senate election for them…or, 800,000 jobs in the month of October a just 32 days from the Presidential election…
AMAZING!
LOL

Strike Hornet on October 5, 2012 at 4:02 PM

That’s just to move the Obamas out of DC. Lots of Nobel prizes, Hope and Change shirts, and such

faraway on October 5, 2012 at 1:40 PM

+eleventy

Laura in Maryland on October 5, 2012 at 4:22 PM

Can someone explain where the 600,000+ new jobs came from?…the explanation from CNBC and Solis did not make any sense…I’m so confused.

tkyang99 on October 5, 2012 at 1:30 PM

The same place as “Romney’s $5 trillion tax cut for the wealthy”

talkingpoints on October 5, 2012 at 5:06 PM

Blah blah blah “four million jobs saved or created!” blah blah blah.

Blah blah blah “873,000 jobs added!” blah blah blah

Which statement is factually correct?

BigAlSouth on October 5, 2012 at 5:31 PM

gumbyandpokey on October 5, 2012 at 12:59 PM

g&p, thanks for your answer!

Let me ask a follow-on, if I may: After the debate, are you still 100% convinced that Romney will lose? If so, why?

I can think of several possible reasons:
– Polls continue to be mediocre to crappy (though they seem to be trending up a little)
– Complete loss of faith in the election process (I understand this…)
– Belief that the Powers That Be (Soros, the Bilderberg Group, etc. have already decided the election
– Belief that Romney is just unelectable, or at least less electable than the 0

Is it any of those reasons? Or something else entirely?

Mary in LA on October 5, 2012 at 5:57 PM

Scarborough: Something’s awfully odd about this job report

Is it once or twice a month that Scarborough pretends not to be a Democrat shill?

RJL on October 5, 2012 at 7:30 PM

*yawn*

Been saying for months that they’d ensure it was below 8.0% right before the election. Is anyone seriously surprised that the actual job growth number is anemic and insufficient, and yet the rate came down again? I didn’t think they’d jump it straight down as far as they did, but I’m with whatshisface – I have no doubt this is a panicked reaction to the debate – they *needed* something big to change the discussion, get a boost of some/any kind, etc.

Midas on October 5, 2012 at 8:58 PM

I saw layers in the jobs report.

stingray9813 on October 5, 2012 at 9:30 PM

both express skepticism over the “major tickdown to 7.8 percent” in the unemployment rate from the addition of only 114,000 jobs

If 114,000 is 0.3% of the Labor force, the labor force is about 38,000,000.

The Population of the US is a bit over 311,000,000.

So our “labor force” in the nation is about … 12% of the country, the remaining 88% is not a part of the labor force?

That or maybe this number doesn’t quite mesh with reality.

Which one of those makes more sense again?

That math wasn’t really all that difficult, was it?

gekkobear on October 6, 2012 at 12:03 AM

Even the Dow seemed quite suspicious of the 7.8% – if they felt confortable, it would have shot up far more than it did. Regarding Scarborough – I’m sad to admit that I watch his show every a.m. only because I just can’t get into the Fox News “curvy couch” brigade (plus I switch to Animal Planet’s “Big Cat Diary” back and forth in the morning) As far as the rest of the day, MSNBC is not to be found on my channel line-up. That said………..

Regarding Scarborough – has anyone else noticed that since the debate, Joe seems to have done a complete 180 on Romney. He’s the biggest Romney fan all of a sudden. I still consider him a hypocrite, especially after his bias “Chant Video” comments. Like I said, I sure wish FOX would change their a.m. format – use a table (like “The Five” but do have guests stopping in and out)I like F & F’s Doocy and Kilemeade – Gretchen not so much.

BabysCatz on October 6, 2012 at 2:49 AM

I happened to be watching the report LIVE from Morning Joe… He seemed a bit… perplexed…

And DOUBTFUL… Most unusual for him…

Mika, as usual, had the ‘deer in the headlight’ look…

Khun Joe on October 6, 2012 at 4:21 AM

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