March 04, 2005
February Employment Numbers
I'm going to pick on Reuters and reporter Tim Ahmann a little bit. Here's the lead to a story on the release of February jobs numbers:
U.S. employers added 262,000 jobs last month, the biggest gain in four months, but the good news for workers was tempered by a rise in the jobless rate.
What could I possibly be criticizing this member of the MSM about? They assume the rise in the unemployment rate is a bad thing. Now, you probably just re-read that last sentence to make sure I really did write what I just wrote. You're probably yelling to your computer screen, "Sean, how can the rise in the unemployment rate be a good thing?" My answer, "It's all about context."
The unemployment rate is the percentage of workers actively seeking work divided by the emplyed workforce. There are times when the lots of people are finding work expanding the employed workforce. If the number of workers looking for jobs doesn't grow as fast the unemployment rate falls. There are also times when the number of workers looking for work grows faster than the employed workforce. When that happens the unemployment rate goes up.
From the February numbers it appears the number of job seekers are growing faster than the total number employed. That means many people who previously didn't think the economy as good enough to bother looking for work are now jobseeking. Why bother looking for a job if you think the economy stinks so much your effort will fail?
Jeannine Aversa for the AP better describes the economic situation:
America's employers added a sizable 262,000 jobs in February ó the most in four months. The new hiring, however, wasn't sufficiently brisk to accommodate a wave of job seekers, and the overall unemployment rate rose to 5.4 percent.
More people looking for work may be a sign of more confidence in the economy despite what the fall in the consumer confidence index also announced today. (Another possiblity is workers are seeking jobs now because they've depleated their savings.)
I'm not harshly criticizing Ahmann and Reuters because if you ask the man on the street if a rise in the unemployment rate is a good or bad thing most would say it was bad. Their gut instinct is that rising unemployment rate means more people out of work, and that's bad. But as the AP demonstrates superficial economics reporting doesn't have to be the norm.
For some other reaction Ken Jarboe gives us a breakdown of the unemployment numbers by general occupation.
"Job Gains Strong, But Jobless Rate Climbs"