It’s time once again for The Future American’s FAIL OF THE WEEK! Every Saturday, I name a person or group who has spent the past seven days behaving in a particularly idiotic way. Since it’s my belief that idiocy knows no politics, nobody is safe.
This week’s fail was brought to you by every member of the media, myself included, and the political establishment who has ever made news out of the national unemployment rate. I’ve already criticized the practice of doing this on a month-by-month basis, since those numbers tend not to mean much that close together. But they don’t mean much over long periods of time, either. How often have you heard economists ascribe drops in the unemployment rate to something other than more and better employment? They’re right!
President Obama is using this month’s jobs report for cosmetic purposes, which we can hardly expect him not to do. Former Gov. Mitt Romney (R-MA) isn’t reacting with quite as much enthusiasm, pointing out that “millions of Americans [are] still struggling for work, living in poverty and using food stamps to feed their families.” Both of these are somewhat better measures of economic improvement, although they, too, are skewed by the fact that people can be below the poverty line and financially ineligible for food stamps while still having a hard time putting food on the table. You need to ask.
But even that’s not what I’m talking about. More bearish commentators on jobs reports will often tell you about people who have dropped out of the labor force by ceasing their work searches, thereby lowering the unemployment rate, which only applies to those still in the labor force. There is such thing as the civilian labor force participation rate, which measures how many people are employed or actively trying to be. That went up by 0.1 percentage points in September.
Or how about wage growth? (Yes, that links to last month’s numbers, but it illustrates my point.) That tells you if the jobs people have are getting better; as I’ve written before, job gains in the private sector could be heavily dependent on how many more people start working at Wal-Mart. That also gives you an idea of where growth in consumer spending is coming from – paychecks or savings?
I’ve got more. Manufacturing output, sales of durable goods (basically, consumer crap, as opposed to food and gas and other things you actually need), home prices. The unemployment rate doesn’t quite mean nothing, but it definitely shouldn’t be touted as some kind of economic oracle. The near-myopic focus on that and the number of new jobs added increases the chance that the average news skimmer won’t get the whole story. So we, as writers and politicians, need to give them more indicative stuff to skim when these reports come out.