The jobs report might, to borrow a phrase, “hide the decline” in employment. Two economists who predicted that the November numbers would be better than expected say the improvement may be attributable to quirks in the Labor Department’s statistical models.
The models adjust for regular seasonal fluctuations in employment, but give added weight to fluctuations in recent years. So the 610,000 jobs that were lost last November in the wake of the Lehman Brothers collapse — the first decline in that month since 2001 and the largest ever recorded — figured heavily into the Department’s estimate of new jobless claims, and could have given “the impression the labor market is improving faster than it actually is.”
Said one of the economists: “It may not be a sign that we have gotten to the point where we are going to see sustainable gains in employment.”
The seasonal adjustment issue seems to have worked in reverse for October, making it appear as though the economy shed more jobs than it actually did. The economists cited in the story also correctly predicted that the jobs report would revise October assessments downward (as noted below).
You can follow the story at NRO On the News