[lbo-talk] another sucky employment report

[Brad DeLong]

>Ken Odono wrote:
>
>>why would Bush predict 2 million new jobs? don't make promises you 
>>can't keep unless they're scheduled to appear after the election. 
>>not exactly a sign of shrewd politics or am i missing something?
>
>The 2 million projection was in line with historical averages, so 
>they were probably hoping for a return to normalcy. But their 
>economic staff isn't of a very high quality, so there was no one 
>sensible around to urge caution (and naysayers aren't welcome 
>anyway). Bush believes he's on a divinely appointed mission, so I 
>guess he'd hoped that God would prompt firms to start hiring.
>
>On closer examination, the internals of the jobs report were as weak 
>as the headline. Had the labor force dropouts stayed in the labor 
>force and been counted as unemployed, the jobless rate would have 
>risen to 5.8% instead of staying unchanged at 5.6%. The labor force 
>participation rate is back at 1991 levels. Real wage growth is 0. 
>Aggregate hours worked throughout the economy are back at 1997 
>levels.
>
>Doug
>___________________________________
>http://mailman.lbo-talk.org/mailman/listinfo/lbo-talk

Ahem!

The forecast was for payroll employment growth at an average pace of 
320,000 per month beginning last November. It was for the creation of 
a total of 3.8 million payroll jobs in 2004. It was for a payroll 
employment number that would cross 132.7 million in June-July 2004, 
and hit 134.5 million in December 2004.

Why make such an ambitious forecast? The obvious theory is that there 
is a widely distributed table that has a slot in it for the average 
employment level in 2004. According to the forecast, the average 
employment level in 2004 will be 132.7 million. That's bigger than 
the 132.5 million payroll employment number in January 2001.

The forecast is weirdly overoptimistic. The only explanation I can 
think of that makes sense is that somebody said that the slot in 
Table 3-1 has to have a higher number than 132.5 million, and that 
the payroll employment forecast was adjusted to make it so.

-- 

Yours,

Brad DeLong