Weâve hit that moment in the election when people begin to lose their minds. Case in point, within minutes of the jobs report, Twitter filled with Republicans claiming the books were somehow cooked, the numbers arenât real, etc.
Letâs take a deep breath. Jobs reports are about the economy, not about the election. Confusing the two leads to very bad analysis.
This is a good jobs report in a still-weak economy. The 114,000 jobs we added in September arenât very impressive. The revisions to the last two months, which added 86,000 jobs to the total, were much more impressive. Those revisions also suggest that Septemberâs jobs could get revised up â or, of course, down. So be careful about reading too much into that number. Still, these are, at best, good, not great, numbers.
The controversy, if itâs worth using that word, is over the unemployment rate, which dropped from 8.1 percent to 7.8 percent. Thatâs three-tenths of one percent. Thatâs what all the fuss is about.
Letâs get one thing out of the way: The data was not, as Jack Welch suggested in a now-infamous tweet, manipulated. The Bureau of Labor Statistics is set up to ensure the White House has no ability to influence it. As labor economist Betsey Stevenson wrote, âanyone who thinks that political folks can manipulate the unemployment data are completely ignorant of how the BLS works and how the data are compiled.â Plus, if the White House somehow was manipulating the data, donât you think they would have made the payroll number look a bit better than 114,000? No one would have batted an eye at 160,000.
The fact is that thereâs not much that needs to be explained here. Weâve seen drops like this â and even drops bigger than this â before. Between July and August the unemployment rate dropped from 8.3 percent to 8.1 percent â two-tenths of one percent. November-December of 2011 also saw a .2 percent drop. November-December of 2010 saw a .4 percent drop. This isnât some incredible aberration. The fact that the unemployment rate broke under the psychologically important 8 percent line is making this number feel bigger to people than it really is.
The number could, of course, be wrong. The household survey is, well, a survey, which means itâs open to error. But the internals back it up. The number saying they had jobs increased by about 800,000. That seems high, but itâs counting 582,000 who say they got part-time jobs.
Thereâs precedent for this. As Daniel Indiviglio notes, part-time jobs increased by 579,000 in September 2010 and by 483,000 in September 2011. It might simply be seasonal hiring. You donât need to resort to ridiculous theories like Democrats across the country suddenly deciding to lie to surveytakers in order to help Obama.
Which leads to another argument: That U6, the broadest measure of labor-market pain, didnât move, which should make us skeptical of the fact that U3, the normal unemployment rate, did move. Thatâs just misunderstanding what U6 is.
U6 is not an unemployment measure. It includes part-time workers who want full-time work. So it doesnât count the increase in part-time work. But every measure of actual unemployment â U1, U2, U3, U4, and U5 â went down. You can see them all here. Again, thereâs no mystery.
This is an encouraging report. What it tells us is that the labor market has been a bit better over the last few months than we thought, and that the recovery hasnât slowed in the ways we feared. What the response to it tells us is that the election is driving people a little bit crazy.