This is the sort of thing I was talking about in a previous post. The jobs data is skewed to look better than it is because we don’t want any investors to get spooked and crash the markets. As preppers, we need to be able to dig through the fluff and find the truth. In this case, despite the rosy spin, the jobs data still isn’t looking all that good. And as we’ve covered in a past podcast, if there aren’t more jobs being created, the economy can’t improve much, if any.
The U.S. economy lost 1.2 million jobs between June and July. But thats not how it got reported. When the Bureau of Labor Statistics (BLS) released its jobs figures for July, it said the economy gained 163,000 jobs. So what gives?
BLS isnt hiding anything. The discrepancy just has to do with whats known as seasonal adjustments. The U.S. economy follows certain predictable patterns in hiring and layoffs every year. School districts always let workers go for the summer and hire in the fall. Retailers always staff up for the Christmas holidays and lay people off afterwards. Students always flood the labor market in June.
So if we want to know how well the economy is doing, we want to know how many jobs were added after taking these predictable fluctuations into account. Some seasonal adjustments are necessary before the data can tell us anything useful.
And this is exactly what BLS does in its monthly jobs reports. As Jacob Goldstein of Planet Money points out, the U.S. economy had 1.2 million fewer jobs (pdf) in July than it did in June. But, according to the bureau, the economy still had 163,000 more jobs than one wouldve expected, given seasonal trends. Thats a sign of a steadily recovering labor market. So BLS reported it as a 163,000 gain in jobs.