A protestor holds a sign during a demonstration against unemployment benefit cuts in Oakland, Calif.
Photo by Justin Sullivan/Getty Images.
When it comes to economic data, as with much else in life, the media tends to overweight the new relative to the true. So each monthly jobs report is scrutinized, but later revisions tend to get ignored. Yet today the Burea of Labor Statisticsdid a rebenchmarking and found 386,000 new jobs.
As you'd expect, that doesn't utterly transform our understanding of the economy. The job market is still weak, all things considered. But it's notasweak as the data we've been seeing imply. And that can help us explain things like "why has the unemployment rate been falling despite weak payroll growth?" or even "how can Mitt Romney be losing with the economy doing so poorly?" The payroll growth maybe wasn't quite as weak as we thought, and the economy overall was perhaps doing a bit better.
And these are just revisions through March. We won't have the real data story of what was going on this fall and summer until long after the election is done, and by then probably it'll just get ignored.
Note that the benchmarking added anetof 386,000 jobs. In gross terms it actuallysubtracted67,000 government jobs so the rebalancing of the American economy away from government employment and toward the private sector has actually gone somewhat further than we realized. Note that this also means that the Obama Era has crossed the symbolically important zero line. More Americans are employed today than were when he took office.
BLS reports today that the economy added 114,000 new jobs (with, I remind you, a +/- 100,000 confidence interval) in September. Upward revisions to July and August data found a total of 86,000 new past jobs. Separately the household survey reports a fall in the unemployment rate to 7.8 percent, which brings joblessness below the politically salient threshold of 8%.
I'm going to look deeper and do some more analysis, but I do have to say thatthe recent rebaselining exercize that discovered almost 400,000 missing jobswas a reminder that the online press has started paying too much attention to this monthly data. It's based on a statistical sample with a large margin of error. It gets revised twice through the sampling data, and then is subject to further revisions as per the rebaselining. A strong number is better than a weak number, but there really isn't a ton that can be inferred from month-to-month fluctuations until they're well in the past and we have more accurate data.