The U.S. Bureau of Labor Statistics released new employment data, with the BLS reporting 225,000 new jobs created, according to the Establishment Survey.
A survey of economists by Bloomberg had predicted an increase of 180,000 jobs, so this report beats expectations. The press, not surprisingly, is gushing over the good economic news.
To get a better sense of the jobs situation in context, though, we need to look beyond the headline data and delve more deeply into what the BLS is reporting.
Moreover, it’s important to look beyond the government seasonal adjustments which can be employed to massage the numbers even more than the usually-employed methods.
So, a look at the non-seasonally-adjusted unemployment rate shows an unemployment rate of 5.1 percent for July 2016. That’s compared to 5.6 percent for last year.
There’s a little bit of an improvement there, but the unemployment rate is a function of both the number of people who say they’re in the labor force, and the number of people who say they want jobs and have them.
So, we must look beyond the unemployment rate since changes in the size of the work force can push down the unemployment rate without any real gains in total employment.
For example, in spite of a falling unemployment rate, if we look at the actual number of unemployed people, we find that little has changed over the past year: – READ MORE
