Trying to Get a Handle on the Unemployment Figures

There is nothing wrong with healthy skepticism (which is different than outright denialism).

Let me start with what I hope is a clear position:  I do not have a problem with people asking questions about numbers (or, really, about anything at all) whether we are talking about poll numbers or the unemployment figures, or whatever the case may be.   What I have a profound problem with, however, are people who question numbers not because they have a reason to do so, but because they simply don’t like the result.

An apropos (although hardly perfect, analogy-wise) example from last night:  Braves fans have a reason to question their loss in their playoff game last night because of a controversial application of the in-field fly rule by an umpire.  Braves fans can argue, with some legitimacy, that the umpire in question contributed to their loss.  Now, Texas Rangers fans can try and cook up a conspiracy about how they lost because of the umps, but they would be full of baloney to make such claims.

My problem, as I have tried to explain numerous times, with what I call poll denialism is that the claims made regarding the polls are predicated not on sound arguments, but exclusively on the fact that some people do not like the results.  Indeed, some have gone so far as to re-calculate the numbers to make them fit a preferred outcome. Such moves are not science, analysis, nor argument.  They are fiction.

The issue to me in all of this is not whether the numbers reflect my personal preferences, but rather whether or not we are having a rational conservation (both individually and nationally) on these issues.

Turning to the unemployment numbers, I have two reactions.

First, the notion that the Bureau of Labor statistics, a group of career civil servants who study stats (i.e., are numbers geeks) are going to cook the books to help an incumbent president are absurd.  As such, I think that the 7.8% number has to be accepted within the confines of the process that has produced unemployment rates for decades.  Indeed, one of the ironies of the denialist position is that they seem to accept older unemployment figures as true (since they make explicit comparisons to the past), but they just don’t like this one.  This is a self-negating position because if the most recent numbers can be as easily manipulated as they are claiming, then there is absolutely no reason to trust the fidelity of past numbers.  Once we hit that territory it is impossible to have a conversation about these figures because they all become utterly suspect.

This leads to my second observation:  clearly the unemployment calculation is a bit less solid than basic election polling.  It is very much a less exact process.  As such, it is fair to ask about the degree to which a given number is accurate.  For example we can note a key difference between the two processes:  it is normal for the unemployment report to be revised upward or downward over time.  Further, the margin for error in election polling and determining the unemployment rate are quite different.

Ultimately there is, therefore, a profoundly important difference between questioning numbers because of methodology or because they seem out of sync with previously results and rejecting them as part of a conspiracy.

So, what should we say about the numbers yesterday?

The number that caused, understandably, was the household survey.  Catherine Rampell at the NYT‘s Economix blog notes:

the household survey — the survey that the unemployment rate comes from — showed that the number of people with jobs rose 873,000 in September, though the gain had averaged 164,000 each month earlier this year.

These numbers are always tremendously volatile, but the reasons are statistical, not political. The numbers come from a tiny survey with a margin of error of 400,000. Every month there are wild swings, and no one takes them at face value. The swings usually attract less attention, though, because the political stakes are usually lower.

I am going to agree that that 873,00 number is improbable and that we may find out that it was in error in the next survey (or we may find out that they were correct).  Regardless, that is one heckuva an MOE.

It should noted that a lot the people in that number (582,000) are part-timers.

It should also be noted that the 873,000 number is supposed to reflect the number of people who found work, while the 114,000 number (the other key number released yesterday and derived from a different survey) is supposed to be the number of new jobs added to the economy.  I do agree that there is a reason to ask how the two numbers work together.  There are also a variety of variables here, including question of long-term unemployed, people who are, or are not looking for jobs, etc.   I do not, for the moment, pretend to be able to succinctly explain (or even claim to fully understand) all of these figures.  Indeed, one of the problems here is that we are comparing numbers from two different surveys and which do not avail themselves to quick arithmetic (since part of the issue is not just jobs v. no jobs, but also whether people are actively looking for work or not).

In regards to the private sector job creation number we have the following in terms of history and trends:

Here’s a longer-term view:

 

Ultimately, however, it isn’t as if 7.8% is a fantastic number.  And, for that matter, a movement of .3 points is hardly Olympian (and certainly not unprecedented).

It can also be helpful, when evaluating a given set of numbers, to look for evidence that either corroborates (or negates) the numbers in question.  We can do this by turning to Gallup’s unemployment survey (which uses a different methodology):

Gallup Adjusted and Unadjusted Unemployment Rate Trend, January 2011-September 2012

Now, to me the biggest take-away from the graph above is not the actual number (although the seasonally adjusted number is quite close to the BLS figure), but rather the trend.  The trend comports with the general trend of the official unemployment figures.  This gives us a reason to think that the numbers from yesterday are legitimate.

In terms of overall numbers, Tom Foreman notes:

The Bureau of Labor Statistics confirms that a lot of jobs have been created under Obama’s leadership — 4.4 million by the bureau’s latest count. What Obama did not say, however, was that the nation shed 4.3 million jobs during the early days of his term, and that the net gain since he took the oath of office in January 2009 is just 125,000 jobs.

A such, we are just slightly better off now than we were back at the end of the Bush administration. And, of course, the unemployment rate at the time was 7.8% (which may sound familiar).

Another measure that strikes me as of interest is the recent increase in the President’s approval rating to 54% in the Gallup survey, which would seem to indicate a general increase of satisfaction in the population.  One of the reasons that number gets better, especially at levels not seen in years, is economic improvement.

The general trend has been, in fact, a weak recovery.  We should be happy about the recovery part, and not so pleased by the weakness part.

See also, Joe Nocera:  Jobs Report: Cooked or Correct?

In conclusion, I would state that I can see why there is debate over the 873,000 figures (a debate that will be settled through the next several jobs reports because, unfortunately, actual conclusions require time and data).  However, I would also note that the evidence does suggest a recovery and so, to turn this back to electoral politics, it is not surprising that the incumbent finds himself in a somewhat better position at the moment than does the challenger.

FILED UNDER: Campaign 2012, Economics and Business, US Politics
Steven L. Taylor
About Steven L. Taylor
Steven L. Taylor is a Professor of Political Science and a College of Arts and Sciences Dean. His main areas of expertise include parties, elections, and the institutional design of democracies. His most recent book is the co-authored A Different Democracy: American Government in a 31-Country Perspective. He earned his Ph.D. from the University of Texas and his BA from the University of California, Irvine. He has been blogging since 2003 (originally at the now defunct Poliblog). Follow Steven on Twitter

Comments

  1. superdestroyer says:

    There is no reason for people to get excited about the unemployment numbers because high unemployment numbers no longer have any effect on politics. Considering the groups with the highest unemployment rate (blacks, hispanics, 20-somethingsc, rust belt state residents) are the least likely to be swing voters and the most likely to be automatic Democratic Party voters, it should be obvious that unemployment will have no effect on the election.

    Conservatives, instead of whining about polls, should start thinking about the long term and how they can have any effect on policy and governance when more than 50% of the voters are automatic Democratic Party voters.

  2. Smooth Jazz says:

    “My problem, as I have tried to explain numerous times, with what I call poll denialism is that the claims made regarding the polls are predicated not on sound arguments sound arguments, but exclusively on the fact that some people do not like the results.

    STOP. PATRONIZING. US. WILL. YOU. Questioning a poll that has a Dem 10%+ partisan advantage in a swing state where Rep voters lead Dems in registration – barely 2 years after an election when Rep enthusiasm for throwing Obama out was at a fever pitch – is a reasonable thing to do. Especially when the poll is sponsored by entities such as the NY Times and MSNBC that are known to be hostile to Romney or partisan Dem pollsters such as PPP. And I’m NOT talking about that unskewed.com nutcase who is making up his own polls. Only KoolAid drinking partisans believe that guy has the answer.

    Now we come to find out that Dem registration and absentee ballot requests in swing states such as OH are WAY down from 2008, which calls into question why an ABC or MSNBC poll for OH can show a Dem 10%+ turnout margin. Makes absolutely no sense. Yet openly left blogs and respected Media types have already called the election for Obama months before the election without scrutinizing these Obama leaning polls and asking why are so many more Dems are being polled in OH 2 years after Reps outvoted Dems by 5%+ in the state. Yes, I know more Obama voters will come out in a Presidential election that didn’t vote in 2010, but does anyone believe that Obama is going to top the Dem 5%+ OH turnout he had in 2008 when he was the new, transformative guy on the block.

    Now, after his halting, bumbling performance in the debate, it will be interesting to see if we continue to get these Dem 10%+ bogus samples out of the swing states. As I mentioned in another post, do not underestimate the impact of 70M+ people seeing Obama as an empty suit acting as if he is an empty chair as the latest New Yorker Magazine cover suggests:

    http://www.powerlineblog.com/archives/2012/10/if-hes-lost-the-new-yorker.php

  3. @Smooth Jazz:

    Have you actually read the articles published in that New Yorker issue? They’re hardly anti-Obama.

    See here and here.

  4. @Smooth Jazz: At this point, all I can suggest to you is that you stop reading my posts if you find them so problematic.

    If you don’t take me seriously, that’s cool, as the feeling is mutual.

  5. I will note, that there has been a slight closing of the gap in the tracking polls: click. I expect this reflects the president’s poor debate performance.

    I have no problem accepting these numbers.

  6. Herb says:

    I don’t know how you do it, man. To me, the arguments you’ve been countering these last few days have been in such obvious bad faith that mockery and dismissal seem to be the most appropriate response.

    Not the best…which would probably be your approach….but the most appropriate.

  7. john personna says:

    7.8 differs from 8.1 by … (8.1-7.8)/8.1 = 3.7 percent.

    That is, the change itself is only 3.7 percent of the whole. Big deal.

    The drama is innumerably atop “leading digit” psychology. A $7.99 burger is much cheaper than a $8.00 burger because that leading digit confuses our human brains.

    I guess, worried that the leading digit will make people think “7.8 equals 7” there is this weird hue and cry. Sad. I blame our schools. (Not really. I blame lazy adults who stop working at ideas.)

  8. Carson says:

    A huge amount of the seasonal jobs come open at this time of the year. The difference is that in the past, these jobs were taken largely by retired people and students. Now they are mostly taken by people who have been laid off and just trying to buy some food. This country is moving quickly into a “just trying to scrape by and survive” economy. Far from what we had 10-15 years ago.

  9. john personna says:

    heh, I let spell check do “innumeracy” for me.

  10. john personna says:

    I blame AI

  11. Jim Henley says:

    Stephen: Another good post. Also, we know the two most recent payroll-survey figures for jobs created were revised upward. That suggests that the last couple household surveys could have been undercounting new job-holders rather than the new one over-counting them.

    But the larger point, which you also allude to, is that the only sanity regarding this kind of thing is to be found in trend lines.

  12. Doubter4444 says:

    @Smooth Jazz:
    How about you stop writing in a way that begs patronization?
    Honestly – time after time you pop up and righteously spout the wingnuttest party line while effectively ignoring the subject of the post.
    It’s comic relief by now, basically.

  13. stonetools says:

    Let’s say for some reason(more people returning to look for jobs, say) the unemployment rate jumps back to 8.2 per cent next month.. Is there ANY doubt that conservatives will then accept that figure as God’s own verdict on what the unemployment rate is?

    Conservatives here are putting the H in hypocritical.

  14. Smooth Jazz says:

    “Have you actually read the articles published in that New Yorker issue? They’re hardly anti-Obama.”

    Yes, I’m aware that NY Magazine has had great things to say about Obama. Everybody knows that NY Magazine leans left and that was my point: For a well known left of center magazine who normally supports Obama to put such a provocative cover suggesting he flopped during the debate, using the widely panned Clint Eastwood Empty Chair punchline, is an omninous and dangerous sign for Obama. Notably, the picture is on the cover which is being disseminated and widely distributed on the internet. In relative terms, very few people will read the words in the magazine.

    Unfortunately for Obama, once the comedians latch on to you, especially sympathetic comedians, things can unravel in a hurry. In part, that is what happened to this blog’s favorite punching bag: Gov Sarah Palin. Once the comedians started making fun of her, things started downhill. In the past few days, we’ve seen the following from comedians, publications and other well known people usually supportive of Obama:

    1. NY Magazine put an Empty Chair on its cover as an indicator of his debate perfomance
    2. Bill Maher joked that Obama used his $1 donation to buy weed
    3. Rapper Ice T told Obama to lay off the weed next time
    4. Leno ran a segment where he showed Chris Matthews getting hauled off in a straight jacket while freaking out over Obama’s performance
    5. Jon Stewart joked about Obama being steamrolled by Romney
    6. Al Gore claimed it was the altitude
    7. Etc, Etc, Etc

    Obama may think a tepid and arguaby murky job report where 500,000 part time folks being added to the Household Survey and the the related 7.8% print will save him, but if the comedians continue to pound him and make provocative jokes about him being on drugs, watch out below.

  15. Smooth Jazz says:

    “At this point, all I can suggest to you is that you stop reading my posts if you find them so problematic. If you don’t take me seriously, that’s cool, as the feeling is mutual”

    I have no problem with your posts. I have a problem with people suggesting anyone questioning the out of line partisan samples by media and MSM pollsters belongs in a nuthouse and is a conspiracy whackjob. There are some reasonable conservatives asking these ABC & MSNBC & Pew & CBS etc etc pollsters where are these wacky Dem 10+ samples in swing states with normally Dem approx = Rep registration and voting patterns coming from?? And they’re response is basically: “We don’t know, and we don’t care. It is what it is, now run along”. That is really what I consider patronizing and condescending.

  16. bk says:

    @Smooth Jazz: New Yorker and New York Magazine are two different publications. Idiot.

  17. bk says:

    @Smooth Jazz:

    but if the comedians continue to pound him and make provocative jokes about him being on drugs, watch out below.

    Just about every voter that I know who is still undecided has said to me on more than one occasion “I’m going to wait and see who Jon Stewart and Jay Leno end up endorsing”.

  18. Ben Wolf says:

    @Steven Taylor

    It should also be noted that the 873,000 number is supposed to reflect the number of people who found work, while the 114,000 number (the other key number released yesterday and derived from a different survey) is supposed to be the number of new jobs added to the economy.

    The discrepancy is due to large numbers of people dropping out of the workforce entirely. The BLS, in this particular measure, assumes those no longer reporting they are looking for work have somehow found a job or chosen to engage in leisure activities rather than work. So we get a new jobs figure lower than that needed to keep up with population and a dropping unemployment rate. The truth is unemployment is and has been increasing, we simply choose to forget about them because they are inconvenient both to those who support the President and those who want Mitt Romney to cut everything.

    Most certain in all this is that neither party really seems to give a damn about the tremendous social and economic damage resulting from mass unemployment.

  19. Smooth Jazz says:

    “@Smooth Jazz: New Yorker and New York Magazine are two different publications. Idiot.

    Just about every voter that I know who is still undecided has said to me on more than one occasion “I’m going to wait and see who Jon Stewart and Jay Leno end up endorsing”.

    BooHooHoo – Your guy got his clocked cleaned on Wed, and like the devoted far left crank, you’re lashing out and name calling. So I juxtaposed NY Magazine and New Yorker. Who cares. They are both left of center publications based in the Wash DC/NY corridor. The more critical dynamic is the picture will get widespread distribution, beyond the typical New Yorker cover, because it is a caricuture of a once widely panned Clint Eastwood skit and because it represents the universal depiction of how Obama performed in the debate.

    Rather that calling me names, you should be more concerned that the cover was shown and discussed on Sunday morning news shows such as Meet the Press that is seen by millions of people. Discussing Obama’s inept debate performance using a “Empty Chair” cover in a normally sympathetic magazine on the Sunday Morning news shows is not what the President wants. He would clearly prefer the “great new job number” that came out Friday to be the dominant narrative, not the spanking Romney gave him.

    Finally, Stewart & Leno will almost certainly support Obama, since they are Liberals, but the question isn’t whether undecided voters will wait to see who Stewart & Leno supports. The danger for Obama is that these 2 comedians lead the caricature of Obama as a timid, halting & meek character not up to the job – Much like Saturday Night Live, a show usually sympathetic to Obama, did last night. As I said before, if the comedians get ahold of Obama, watch out below as his soft supporters see him as a joke and peel off.

  20. wr says:

    @Smooth Jazz: “That is really what I consider patronizing and condescending. ”

    Here’s an easy way to get people to stop treating you like an idiot. Stop acting like one.

  21. Smooth Jazz says:

    “Here’s an easy way to get people to stop treating you like an idiot. Stop acting like one.”

    By “people” I suspect you mean 99.999% of the commenters and visitors here. Dude, this is a left leaning blog, where almost all the commenters are Liberals. Of course, I’m going to be called “idiot” and “moron” and “troll” and whatever else Liberals call people that don’t agree with them. The fact that you and other posters are calling me names for expressing an opinion you don’t agree with is an indication to me you are starting to panic and freaking out.

    You can call me any name you want, but the dynamics of this race have changed and now Lefties are lashing out. Gov Romney had an unfiltered presentation to the country, while Obama came off as a bumbling, halting and inept shell of a President mocked by usual supporters such as Saturday Night Live, Leno, Rappers such as Ice T, Maher, Jon Stewart and New Yorker Magazine covers. Your guy is entering a dangerous Phase. Deal with it.

  22. Peter says:

    I still want to know more about these labor force dropouts, the people who aren’t working but aren’t looking for work either, and therefore don’t count as unemployed. Conventional wisdom says that they are so discouraged by the lack of work that they no longer bother looking. I’m skeptical, because in these days of online job advertising it takes very little effort to search for work. My guess is that many of these people have retired early or have started collecting SSDI.

  23. Ben Wolf says:

    @Peter: Just because you can look for work online doesn’t make it easier to find it. When you’ve sent out hundreds of applications and resumes over a six-month period without a positive response, you tend to get discouraged.

  24. grumpy realist says:

    @Smooth Jazz: And what does any of your rant have to do with the unemployment figures?

    I swear, if someone were to post pictures of kittens on OTB you’d find a way to rage against Obama and those that post here.

    Getting back on topic–I’m dubious of the value of the employment figures but that’s because from everything the intelligent people posting have mentioned, it looks like the error bars run the length of the page. So I think we’re still lost in the noise on both. From what the Financial Times has mentioned, it looks like we’re getting back into a slow-down on the economy. At this moment this is probably more a reflection of the uneasiness in China and the continued lack of movement on cleaning up the EU than anything else.

    The best thing that could happen is for Europe to shove Greece out of the Euro and get it done with. Either that, or come out loudly with comments about how they would support Greece no matter what happened. At present we’re seeing the Articles of Confederation break-up Part II.