As soon as the US government released the unemployment results for September showing that nonfarm employment increased by 114,000 (anemic) but yet the rate of unemployment dropped substantially from 8.1 to 7.8 many of the conservative politicians and econimic analysts cried foul. Jack Welsh, the former GE CEO tweeted"If you can't debate then you fix the numbers" and a CNBC personality said: "I told you that they would get the number below 8% just before the elections". All of the above comes under the category of sour grapes. No one who knows anything about the BLS would ever make such an accusation because it is baseless and is something that will be next to impossible to achieve . Over 50 different individuals work on these figures and not a single one has the power to manipulate them. The following is a great explanation of what the unemployment figures mean, as presented by Greg Manikw one of "star" economists in the US.
If you go to the recent release from the BLS, you can find these two sentences a few paragraphs apart:
Total employment rose by 873,000 in September.
Total nonfarm payroll employment increased by 114,000 in September.
To a layman, this may seem confusing. The first statement suggests a robust labor market, the second a more lackluster one. What is going on?
The issue is that there are two surveys. The first estimate of employment comes from the survey of households; the second is from the survey of establishments. I thought readers might like to hear what my favorite intermediate macro textbook says about this issue. Here is an excerpt:
More important than the specifics of these surveys or this particular episode when they diverged is the broader lesson: all economic statistics are imperfect. Although they contain valuable information about what is happening in the economy, each one should be interpreted with a healthy dose of caution and a bit of skepticism.