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https://www.yahoo.com/finance/news/the-jobs-report-is-the-original-fake-news-200745886.html
On Friday, we learned the US economy added 178,000 jobs in November and the unemployment rate fell to 4.6%, while over 95 million Americans were not in the labor force.
Each of these numbers — which come from a 39-page report filled with numbers — is true. But each of these numbers can be framed in various ways to tell wildly different stories.
One person can say the unemployment rate is 4.6%. Another person can look at the same report and say the unemployment rate is 40.3%.
40.3% unemployment rate ?!?!
Some folks might argue the “real” unemployment rate is 40.3%. But they are being a bit disingenuous with their calculation.
The 40.3% would be calculated by subtracting the employment-to-population ratio — which stands at 59.7% — from 100% of the US population over 16 (which the BLS terms the “civilian noninstitutional population”). This pool, however, includes 95 million people who are not actively looking for jobs and are classified by the BLS as not in the labor force. Many of these are retirees, the sick, stay-at-home parents, or full-time students, among other folks who may have reasons for not seeking work.
The 4.6% figure, considered the official unemployment rate, only considers those who either have jobs or are looking for jobs. In other words, 4.6% of the active US labor force does not currently have a job.
Critics argue that the 4.6% rate does not consider those who may want a job but have given up looking for work. There are, however, alternative unemployment rates that consider those who are discouraged or marginally attached to the workforce. (The “U-4” rate, which is unemployed plus discouraged workers, was 5% in November; the “U-6” rate, which is unemployed plus those employed part-time for economic reasons and those marginally attached to the workforce, was 9.3% in November.)
And the thing is, we could go on like this forever.
An informed interpreter of this report knows, however, the 40.3% figure can simply not be advanced as the “real unemployment rate” in good faith.
This figure exists in the report as the accurately calculated difference of two numbers. But it is not the “real unemployment rate.” It is just bad math.
In a political and media environment that has seen an obsession with fake news define the zeitgeist, the jobs report is worth considering as the beginning and end of this phenomenon.
The jobs report is tabulated each month by civil servants and spun as both gospel and heresy no matter the results.
Each month, markets sharpen their narrative knives for this monthly report, seeking to confirm or deny their pre-existing belief that the US economy is in good or bad shape. And every month, the jobs report delivers.
But the report’s fake news characteristics are not because it is published by teens in Macedonia, but because it is full of different “truths” that can be seized on to advance your agenda.
Consider that in 2015, President-elect Donald Trump called the official unemployment rate (the current 4.6%, which then stood at 5.1%) “phony” while touting other figures that ran as high as 42%.
And consider the above calculation of 40.3% as the “real” unemployment rate. If you wanted to affirm a view that the US economy is doing terribly, this would be a number to seize on. It would be a number that, again, you can find in the government’s own jobs report. It just would not say what you think.
Fake news is not always about outright falsehoods; it is also about facts telling a supposedly true story that just isn’t so.
The good and the bad
If you’re looking on the bright side, the unemployment rate in November fell to its lowest level since August 2007 (4.6%), while the underemployment rate — which includes both those out of work and those who want work but can’t find any — is at its lowest since April 2008 (9.3%).
Less encouragingly, 5.88 million Americans currently want a job and the labor force participation rate — at 62.7% — remains near a multi-decade low. Manufacturing employment also fell by 4,000 in November and jobs in this sector have declined by 78,000 since January.
But the other rub is that the numbers reported Friday will be revised in each of the next two monthly reports. October’s report, for example, now indicates 142,000 jobs were added to the economy, fewer than the 161,000 initially reported. But Friday’s report showed September’s job gains were revised higher to 208,000 from 191,000.
Then there are annual revisions.
But the goal of a monthly jobs report — as with any economic survey — is to provide a snapshot of where the economy appears to stand based on a consistent set of data points collected in a uniform manner.
And it is because the jobs report is gathered the same way each month, and seasonally adjusted in a clear, detailed fashion, that markets are able to react to the report and make broad observations about where things stand.
It is the breadth and depth of the report, however, that also allows it to be spun almost any way one chooses.
Manufacturing spin
In a statement on Friday, RNC co-chair Sharon Day said, “The 4,000 manufacturing jobs that disappeared last month come on top of the over 300,000 that have been lost under President Obama, more proof that President-elect Donald Trump’s efforts to stand up for the American worker is the commitment our country needs right now.”
All true.
The balance of Day’s statement discussed Trump’s recent back-and-forth with Carrier that kept some — but not all — of the jobs scheduled to move from Indiana to Mexico in the US.
And while you expect the RNC to emphasize points from one of Trump’s most resonant campaign messages, Friday’s jobs report also reinforces that Trump will inherit an economy doing about as well as we’ve seen in a decade.
In the third quarter, the economy grew at a 3.2% clip, and, again, the unemployment rate stands at nearly a decade low. Wages are rising faster than inflation. The stock market is at record highs. Consumer confidence is at its highest point since before the financial crisis.
Additionally, much has been written about how manufacturing jobs are never coming back to the US. It isn’t about outsourcing but about the automation of the workforce. Employment in manufacturing is down but output is up. Efficiency, not China, is killing US manufacturing jobs.
Source: FREd
Source: FRED
But none of that changes the fact — yes, undisputed fact — that the economy has lost 300,000 manufacturing jobs during Obama’s time in office.
It is this “my facts vs. your facts” dynamic that really creates fake news.
The jobs report is a perfect example of fake news
On Friday, we learned the US economy added 178,000 jobs in November and the unemployment rate fell to 4.6%, while over 95 million Americans were not in the labor force.
One narrative that will define the stock market in 2017
Everything we’re hearing from US consumers right now is great
Businesses in Texas are fired up about Trump
The simple reason why Donald Trump is great for corporate America
The jobs report is a perfect example of fake news
On Friday, we learned the US economy added 178,000 jobs in November and the unemployment rate fell to 4.6%, while over 95 million Americans were not in the labor force.
Business
Why the Jobs Report Is Great for Trump But Bad for You
Chris Matthews,Fortune 23 hours ago .
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For Donald Trump, it’s better to be lucky than good.
The President-elect can hardly be credited for the labor market’s strong showing in November, but he’ll surely benefit from the economy’s momentum as he prepares to take office.
The Labor Department announced Friday that the labor market added 178,000 jobs in November, and that the unemployment rate fell from 4.9% to 4.6%, bolstering the conventional wisdom that the Federal Reserve will raise interest rates later this month. “The solid November jobs report is the last piece for a Federal Open Market Committee increase of 0.25 percentage point in the federal funds rate on December 14,” writes Gus Faucher, Deputy Chief Economist with in a research note. “The economy is close to full employment, and the FOMC wants to start gradually raising interest rates before the economy reaches full employment.”
g9ebo
Contained in the generally good report for the economy was one whopper of a womp womp for workers. Hourly pay fell in November by 3? to $25.89. That followed a huge increase, relatively, a bump of 11?, in October, which had caused some to say the prolonged draught in raises had finally come to an end. But apparently, the so-called raise-less recovery is still alive and well. As University of Michigan Economist Justin Wolfers put it Friday morning on Twitter:
This could be welcome news for Trump and his emerging economic agenda come January. The conventional wisdom had been that the current economy wouldn’t necessarily be congenial to Trump’s promises of tax cuts and spending on infrastructure. Some have argued that those promises would cause massive inflation at a time when the economy has already reached full employment.
But if, as Wolfers argues, the economy can avoid the sort of inflation pressures that today’s low unemployment rate would normally impose, that could mean that it can also accommodate the President-elect’s promised growth policies without pushing up prices dramatically and forcing the Fed to raise interest rates too quickly.
It’s the latter that poses the biggest threat to the Trump economy because a sharp increase in the Fed’s target interest rate could be a recession-triggering event. But if November’s numbers are any indication, the Fed may get a big boost as it tries to raise interest rates back closer to more normal interest rate territory, and help it avoid the need to raise interest rates too quickly, something that neither Trump nor workers would like.
See original article on Fortune.com
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Where Are All the Good Jobs?
US News & World Report .
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Reblog on Tumblr
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And while much ado has been made of the unemployment rate dropping to its lowest level in the post-recession era, in part because of slumping labor force participation, there are plenty of intricacies to those 178,000 additions. "A guy who used to work in a steel mill now flipping hamburgers, he knows it's not the same," Ross said in an interview earlier this week on CNBC's "Squawk Box." "So it's the quality of jobs as well as the quantity, and one of the problems with the recovery is when the newly created jobs are not nearly as remunerative as were the jobs that were lost." According to the Bureau of Labor Statistics, the domestic economy on net lost more than 8 million jobs between February ...
On Friday, we learned the US economy added 178,000 jobs in November and the unemployment rate fell to 4.6%, while over 95 million Americans were not in the labor force.
Each of these numbers — which come from a 39-page report filled with numbers — is true. But each of these numbers can be framed in various ways to tell wildly different stories.
One person can say the unemployment rate is 4.6%. Another person can look at the same report and say the unemployment rate is 40.3%.
40.3% unemployment rate ?!?!
Some folks might argue the “real” unemployment rate is 40.3%. But they are being a bit disingenuous with their calculation.
The 40.3% would be calculated by subtracting the employment-to-population ratio — which stands at 59.7% — from 100% of the US population over 16 (which the BLS terms the “civilian noninstitutional population”). This pool, however, includes 95 million people who are not actively looking for jobs and are classified by the BLS as not in the labor force. Many of these are retirees, the sick, stay-at-home parents, or full-time students, among other folks who may have reasons for not seeking work.
The 4.6% figure, considered the official unemployment rate, only considers those who either have jobs or are looking for jobs. In other words, 4.6% of the active US labor force does not currently have a job.
Critics argue that the 4.6% rate does not consider those who may want a job but have given up looking for work. There are, however, alternative unemployment rates that consider those who are discouraged or marginally attached to the workforce. (The “U-4” rate, which is unemployed plus discouraged workers, was 5% in November; the “U-6” rate, which is unemployed plus those employed part-time for economic reasons and those marginally attached to the workforce, was 9.3% in November.)
And the thing is, we could go on like this forever.
An informed interpreter of this report knows, however, the 40.3% figure can simply not be advanced as the “real unemployment rate” in good faith.
This figure exists in the report as the accurately calculated difference of two numbers. But it is not the “real unemployment rate.” It is just bad math.
In a political and media environment that has seen an obsession with fake news define the zeitgeist, the jobs report is worth considering as the beginning and end of this phenomenon.
The jobs report is tabulated each month by civil servants and spun as both gospel and heresy no matter the results.
Each month, markets sharpen their narrative knives for this monthly report, seeking to confirm or deny their pre-existing belief that the US economy is in good or bad shape. And every month, the jobs report delivers.
But the report’s fake news characteristics are not because it is published by teens in Macedonia, but because it is full of different “truths” that can be seized on to advance your agenda.
Consider that in 2015, President-elect Donald Trump called the official unemployment rate (the current 4.6%, which then stood at 5.1%) “phony” while touting other figures that ran as high as 42%.
And consider the above calculation of 40.3% as the “real” unemployment rate. If you wanted to affirm a view that the US economy is doing terribly, this would be a number to seize on. It would be a number that, again, you can find in the government’s own jobs report. It just would not say what you think.
Fake news is not always about outright falsehoods; it is also about facts telling a supposedly true story that just isn’t so.
The good and the bad
If you’re looking on the bright side, the unemployment rate in November fell to its lowest level since August 2007 (4.6%), while the underemployment rate — which includes both those out of work and those who want work but can’t find any — is at its lowest since April 2008 (9.3%).
Less encouragingly, 5.88 million Americans currently want a job and the labor force participation rate — at 62.7% — remains near a multi-decade low. Manufacturing employment also fell by 4,000 in November and jobs in this sector have declined by 78,000 since January.
But the other rub is that the numbers reported Friday will be revised in each of the next two monthly reports. October’s report, for example, now indicates 142,000 jobs were added to the economy, fewer than the 161,000 initially reported. But Friday’s report showed September’s job gains were revised higher to 208,000 from 191,000.
Then there are annual revisions.
But the goal of a monthly jobs report — as with any economic survey — is to provide a snapshot of where the economy appears to stand based on a consistent set of data points collected in a uniform manner.
And it is because the jobs report is gathered the same way each month, and seasonally adjusted in a clear, detailed fashion, that markets are able to react to the report and make broad observations about where things stand.
It is the breadth and depth of the report, however, that also allows it to be spun almost any way one chooses.
Manufacturing spin
In a statement on Friday, RNC co-chair Sharon Day said, “The 4,000 manufacturing jobs that disappeared last month come on top of the over 300,000 that have been lost under President Obama, more proof that President-elect Donald Trump’s efforts to stand up for the American worker is the commitment our country needs right now.”
All true.
The balance of Day’s statement discussed Trump’s recent back-and-forth with Carrier that kept some — but not all — of the jobs scheduled to move from Indiana to Mexico in the US.
And while you expect the RNC to emphasize points from one of Trump’s most resonant campaign messages, Friday’s jobs report also reinforces that Trump will inherit an economy doing about as well as we’ve seen in a decade.
In the third quarter, the economy grew at a 3.2% clip, and, again, the unemployment rate stands at nearly a decade low. Wages are rising faster than inflation. The stock market is at record highs. Consumer confidence is at its highest point since before the financial crisis.
Additionally, much has been written about how manufacturing jobs are never coming back to the US. It isn’t about outsourcing but about the automation of the workforce. Employment in manufacturing is down but output is up. Efficiency, not China, is killing US manufacturing jobs.
Source: FREd
Source: FRED
But none of that changes the fact — yes, undisputed fact — that the economy has lost 300,000 manufacturing jobs during Obama’s time in office.
It is this “my facts vs. your facts” dynamic that really creates fake news.
The jobs report is a perfect example of fake news
On Friday, we learned the US economy added 178,000 jobs in November and the unemployment rate fell to 4.6%, while over 95 million Americans were not in the labor force.
One narrative that will define the stock market in 2017
Everything we’re hearing from US consumers right now is great
Businesses in Texas are fired up about Trump
The simple reason why Donald Trump is great for corporate America
The jobs report is a perfect example of fake news
On Friday, we learned the US economy added 178,000 jobs in November and the unemployment rate fell to 4.6%, while over 95 million Americans were not in the labor force.
Business
Why the Jobs Report Is Great for Trump But Bad for You
Chris Matthews,Fortune 23 hours ago .
Comments
Sign in to like
Reblog on Tumblr
Share
Tweet
For Donald Trump, it’s better to be lucky than good.
The President-elect can hardly be credited for the labor market’s strong showing in November, but he’ll surely benefit from the economy’s momentum as he prepares to take office.
The Labor Department announced Friday that the labor market added 178,000 jobs in November, and that the unemployment rate fell from 4.9% to 4.6%, bolstering the conventional wisdom that the Federal Reserve will raise interest rates later this month. “The solid November jobs report is the last piece for a Federal Open Market Committee increase of 0.25 percentage point in the federal funds rate on December 14,” writes Gus Faucher, Deputy Chief Economist with in a research note. “The economy is close to full employment, and the FOMC wants to start gradually raising interest rates before the economy reaches full employment.”
g9ebo
Contained in the generally good report for the economy was one whopper of a womp womp for workers. Hourly pay fell in November by 3? to $25.89. That followed a huge increase, relatively, a bump of 11?, in October, which had caused some to say the prolonged draught in raises had finally come to an end. But apparently, the so-called raise-less recovery is still alive and well. As University of Michigan Economist Justin Wolfers put it Friday morning on Twitter:
This could be welcome news for Trump and his emerging economic agenda come January. The conventional wisdom had been that the current economy wouldn’t necessarily be congenial to Trump’s promises of tax cuts and spending on infrastructure. Some have argued that those promises would cause massive inflation at a time when the economy has already reached full employment.
But if, as Wolfers argues, the economy can avoid the sort of inflation pressures that today’s low unemployment rate would normally impose, that could mean that it can also accommodate the President-elect’s promised growth policies without pushing up prices dramatically and forcing the Fed to raise interest rates too quickly.
It’s the latter that poses the biggest threat to the Trump economy because a sharp increase in the Fed’s target interest rate could be a recession-triggering event. But if November’s numbers are any indication, the Fed may get a big boost as it tries to raise interest rates back closer to more normal interest rate territory, and help it avoid the need to raise interest rates too quickly, something that neither Trump nor workers would like.
See original article on Fortune.com
More from Fortune.com
Is the Tech Industry Doomed To Be Hated?
Unemployment Rate Hits New Post-Financial Crisis Low
Carrier Announces Deal with Donald Trump to Keep Jobs in Indiana
The Trump Divide at IBM
Why Japan's Flat Jobs Report May Be Good News for the Economy
Business
Where Are All the Good Jobs?
US News & World Report .
Sign in to like
Reblog on Tumblr
Share
Tweet
And while much ado has been made of the unemployment rate dropping to its lowest level in the post-recession era, in part because of slumping labor force participation, there are plenty of intricacies to those 178,000 additions. "A guy who used to work in a steel mill now flipping hamburgers, he knows it's not the same," Ross said in an interview earlier this week on CNBC's "Squawk Box." "So it's the quality of jobs as well as the quantity, and one of the problems with the recovery is when the newly created jobs are not nearly as remunerative as were the jobs that were lost." According to the Bureau of Labor Statistics, the domestic economy on net lost more than 8 million jobs between February ...
