The Real Story on Workforce Numbers: No Change?

There’s been a great deal made of whether the unemployment rate dropped, or if the number of individuals in the job market dropped by some 1.2 million. If the American Spectator is to believed, this has all been much ado about nothing. Owing to a once-in-a-decade adjustment based upon census data, they make the case that the workforce didn’t lose over a million workers, but neither did the real unemployment rate drop.

In other words, the participation rate (employment-population ratio) was reported to have dropped by 0.3%, exactly the amount of participation rate “drop” created by changing the population number used in the calculation (due to updated census data.) Without this once-a-decade adjustment, the change in participation rate would have been reported as…wait for it…zero.

I don’t want to overstate the significance of Durden’s oversight, which conservative voices around the media and the web are also making, namely the idea that the participation rate dropped 0.3 percent and the labor force dropped more than 1.2 million in the past month. Those things are simply not true no matter how loudly people scream “conspiracy” and “propaganda.” (Having been trading financial markets for about 25 years, I’ve heard these same accusations about economic data being manipulated to help the incumbent president — whether Democrat or Republican — so many times, they just bore me now.)

Damned lies and statistics, that’s all I’ll say. Should it be, pick the ones you prefer and let the messaging fight it out?

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