Upon reading a report that job creation did not meet expectations and that unemployment decreased because the number of discouraged workers (workers who are no longer seeking employment) I stopped reading, and refused to listen to the news to protect my optimistic mood. Instead, I relentlessly prepared for classes that begin on Monday. Not wanting to learn about an event because it is negative is decidedly unscientific.
This morning, I decided to resume the role of an economist and read “US jobs report an ‘utter mess’” by Robin Harding of the Financial Times (HT Drudge Report). I found the report excellent; it contained information on statistical reporting that is often absent.
The monthly Employment Situation report contains two different measures of employment: a survey of employers and a survey of households. Forecasters had expected private job creation would climb toward 200,000. The survey of employers showed payroll growth of 106,000, hardly an encouraging report. The survey of households showed that 297,000 more people were employed but that there were 260,000 fewer people in the labor force. The combination of more employed workers (positive) and fewer labor force participants was mixed news. The unemployment rate fell from 9.8 to 9.4% November to December but the labor force participation rate fell from 64.5 to 64.3% over the same period. The conclusion, disappointingly slow growth continues.