When the U.S. jobless rate dipped in September from 8.1 percent to 7.8
percent, opponents of President Barack Obama decided the books had been
cooked.
"In a move that is simply beneath the dignity of the Oval Office,"
declared conservative talk-show host Sean Hannity, "it appears that the Obama
administration altered, for political gain, the monthly jobs report."
The fact that economists on the left and right dismissed that notion made
no matter. Obama's critics said the fix was in.
"When you look at the hard data," said Hannity, "there is no way to
explain how the rate decreased from 8.1 percent to 7.8 percent."
Actually there is, but we'll get to that in a minute.
As Florida and the nation look to goose a sluggish labor market, few
pieces of economic data are as scrutinized -- and misunderstood -- as the
monthly jobs report.
Calculated by the Bureau of Labor Statistics, the unemployment rate is
the measure that grabs headlines and resonates most with Floridians worried
about economic security. In the hands of politicians, it is an effective
cudgel, used to batter opponents.
The rate is produced each month by government economists working under
tight security.
The Washington Post reported this year that in the week before the
release, there are daily confidentiality agreements, computer encryptions and
a work space that is off limits to anyone who doesn't have clearance. When BLS
staffers step out to use the bathroom, they lock their data in a safe.
The agency relies on two surveys to produce its report -- and this is
often where confusion begins.
One survey samples about 65,000 households, asking people about their job
status. Data from the household survey are used to calculate the unemployment
rate: the percentage of people who are out of a job and looking for work. That
last part is crucial: You're not considered unemployed if you're not searching
for a job.
The second survey focuses on 140,000 businesses, asking them about total
jobs, earnings and hours worked. From this, BLS estimates the number of jobs
added each month.
Typically, the different surveys move in concert. Job gains push
unemployment down. Job losses nudge it higher.
But sometimes, the numbers are funky -- which brings us to September.
The government reported 114,000 new jobs, a modest increase. But the
household survey found the number of people who said they were working jumped
by 800,000. That's what pushed the jobless rate down and prompted accusations
of tampering.
Economists say it's not unusual for the two surveys to produce different
numbers because they measure different things. For example, the self-employed
don't show up in the survey of businesses, but they are counted as working in
the household survey. And respondents are counted as employed in the household
survey even if they've worked just an hour during the survey period.
The monthly numbers are a first pass, and they're often revised.
September's job creation, originally set at 114,000, was revised to 148,000.
August's figures were revised to 192,000, up from 142,000.
Mark Vitner, a senior economist for Wells Fargo, said he thinks the
September report overstated the strength of the labor market. But he has
little time for conspiracies.
"I am absolutely certain," he said, "that the unemployment-rate numbers
were not tampered with in any way."
Even so, some conservatives have suspected as much for years.
