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« Investors: De-mystifying the Central Bank Balance Sheets | Main | Bernanke to Savers: We don't owe you a living »

February 01, 2012



Joe -- The seasonal adjustments are not guesstimates, as you call them. It is a sophisticated statistical process developed over a number of years with a lot of constructive criticism involved. It is a very open process which you can learn about here:">">

If you just went to and searched for seasonal adjustments you would find many pages of discussion and description as well as past data. You could look at past years and compare the year-over-year changes to see that the result is the same.

Or you can start with your conclusion and stick with it, regardless of the evidence. As I said, you need to find some new sources!


Re: "There was an improvement and also improvement in labor force participation."

Jeff – you are mistaken big time. The monthly employment number is just an estimate by BLS economists

BLS reported their guesstimates based on assumptions (models) and inflated above previous years average seasonal adjustments – these were the estimates based on opinions of BLS economists, not the actual real numbers.

The economy lost 2,689,000 jobs, but the seasonal adjustment was 2,932,000 jobs. How did they come up with this above average seasonal adjustment number – 2,932,000? Why don't they (BLS) show us how they derived this seasonal adjustment number and why they think the seasonal adjustment should be higher this year vs. prior years?

People who claim "there was an improvement" are having a hidden agenda or simply lying. Nobody can make such claims (not even BLS economists) because these estimates and assumptions are subject to large revisions in the following months.


Joe -- You are mistaken. The problem lies not with the BLS, but with the Census Bureau. They estimate population changes each year. When the decennial census is available, they have improved numbers.

What the BLS does is implement the improved census data. Do you think they should ignore this? They then have a choice of revising all of the estimates for the last ten years to smooth out the population effect, or making a one-time adjustment. If you read their report --- right down to the bottom of the page -- you will see that this is explained very carefully. The census change had zero effect on the unemployment rate in U3. There was an improvement and also improvement in labor force participation.

You need better sources for your information!



It was the most flawed and misleading BLS report in decades.

December to January BLS reported U3 headlines were completely misleading – BLS dumped 10 years worth of US population/demographic revisions into a single month and used it as the baseline aggregate number for computing reported U3.


Molly -- Thanks for joining in. All good points. There is some variation in the nature of the surveys and the timing of the various BLS approaches, but they are all close.

You have the key point: The key aspects of business dynamics.


Middle Molly's America

Hi Jeff! I just came across your blog today, and I'm glad to see someone I can agree with writing about employment numbers. I'm not an economist or a statistician; but I'm very interested in jobs numbers and calculations thereof. I started investigating jobs numbers back when the economy started to crash in late 2008. I needed to understand what these statistics meant. I have found and read so much that is just plain wrong, so I value your thoughts.

I also agree that, considering the size of the population and the number of jobs, the BLS does a very decent job in its estimates and is fundamentally honest. I wrote early last year, "If the BLS is "cooking the books", why didn't they cook the unemployment rate down below 8.5% or even 8.0% before the November 2010 midterms?"

And many, many people forget that, even though many people are laid off monthly, many people are also hired monthly, in good times and bad. Now, how do the numbers reported in business dynamic tie into the reports of JOLTS numbers of new hires vs. layoffs/quits? There were about 11,400,000 private hires in that same three month period (March through June 2011) and 11,059,000 private separations, for an increase of 341,000 hires over separations for that quarter. That underestimates both the private CES numbers and the business dynamic numbers.. though it is really close to the CES estimates for the same period of time. It also shows how much "churn" there is in hiring and separating during any month.


Proteus -- That is a good analogy. This also helps people understand how we can have initial claims running at 375K per month and still have reduced unemployment.

Thanks for joining in.



J.Wiedwald -- You are mistaken. The methodology is clearly stated in the BLS technical bulletins. BTW, about 1.2 million jobs are created every quarter at new establishments.

Here is a quote from their tech notes: "Gross job gains include the sum of all
jobs added at either opening or expanding units. Gross job losses include
the sum of all jobs lost in either closing or contracting units. The net
change in employment is the difference between gross job gains and gross
job losses."

J. Wiedwald

Aaaa - I don't think 7 million jobs are "created" every quarter; they ARE made available to new employees, but for the most part they are openings due to someone leaving the job rather than requiring more workers.

"Created" is usually interpreted as new or additional and that just isn't the case.


The way the BLS estimates jobs reminds me of how my friend proposed to determine the weight of an elephant hair. Weigh the elephant, shave off the hair, and reweigh the elephant :)

Glad you mentioned the 7 million new jobs. People don't realize that unemployment would be multiples of what we have now, if it weren't for significant (but still inadequate) levels of job creation.

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