The Feds said last Friday that the economy added over 200,000 jobs and the unemployment rate stayed at 8.3%
I’d predicted 8.5% or higher … hmmm.
First, unemployment claims increased in each of the 4 weeks in February
That would make you think that the unemployment rate would go up, right?
Not so, using Fed math … the BLS reported that the seasonally adjusted unemployment rate stayed at 8.3% …
But, take a peek at the raw unemployment rate … the one before the Feds adjust for seasonality.
Hmmm. Looks like the rate has ticked up in the past couple of months … and is now around 8.7%
The secret sauce: the seasonal adjustment factors.
I guess a guy doesn’t feel unemployed if he’s unemployed in February … seasonal unemployment is different.
Let’s look at the main data series that goes into the unemployment rate: the number of employed people.
Again, the Feds report steady improvement on a seasonally adjusted basis.
But, when the seasonality factors are backed out, actual employment levels have been going down … consistent with the unemployment claims data.
Finally, for fun, let’s match the seasonally adjusted unemployment rates data (which is reported by the Feds) against the raw numbers (which the Fed calculate but don’t shout out).
Pretty interesting … says we’re in a period when seasonally adjusting helps the unemployment rate appear more favorable … but when we head into Aug, Sept, Oct, Nov … seasonally adjusting makes the unemployment rate look less favorable.
My next prediction: about mid-summer, the Feds will come out with some cock-and-bull story explaining why they’re going to start report unemployment data that isn’t seasonally adjusted.
And, they’ll say with a straight face that the change in reporting methods has nothing to do with the election.