Each Month, the US Bureau of Labor Statistics releases their Employment Situation Summary,
lovingly called the “Jobs Report” by pundits and politicians, who often use the report
to paint the economy any way that they’d like.
The same exact report can be touted as disastrous by Fox News, who ran a story on how August’s
job report proves that the US economy is in crisis.
Or as a positive by NPR, who ran a story on how the disappointing jobs report may actually
be masking a strong and gaining economy.
So, reports about the jobs report aren’t necessarily that helpful, and the jobs report
itself doesn’t necessarily tell us all that much about the economy.
It just tells us the number of jobs added or lost over the last month and the current
unemployment rate.
That’s it.
The most recent report showed that the economy added 142,000 jobs in August.
And that the Unemployment Rate dipped from 6.2% percent in July to 6.1% percent in August.
Both of those sound positive, but can be spun as negatives.
Based on trends over the past 6 months, economists expected about 200,000 new jobs to be added,
but we only added 140,000 new jobs.
So, we expected more new jobs in August than we actually got, which isn’t good.
They also expected a lower unemployment rate.
So, that didn’t match projections either.
But it’s depiction as positive or negative doesn’t affect the information in the actual
report.
Last month we added 142,000 jobs and the unemployment rate dipped to 6.1%.
This represents some growth.
It doesn’t mean that our economy is booming or tanking.
It’s pretty much business as usual.
So, why does the Employment Situation Summary matter?
Because of charts like this:
This graph shows the number of jobs added year over year.
The bottom chart shows the unemployment rate over that same time.
The dip in jobs added, and spike in unemployment, from 2008 to 2010 represents the bursting
of the housing bubble, the sub-prime mortgage disaster, and the great recession.
The time period after that represents the speed at which the economy is recovering.
So, the Employment Situation Summary looked at over time can show us useful information.
If month-over-month the "Jobs Report" constantly trending down, or if there is a sudden change
in a short period, there may be reason for concern.
But if that isn’t happening, over scrutinizing the report every month, like 24-hour news
companies are wont to do may not be particularly valuable.
If you care about getting a good value and want to help the show.
Check out our sponsor Ting.
Go to testtube.ting.com to see how much you’ll save on phone service.
If you do that now, you'll get $25 off a new device or $25 in service credit.
There are no hidden ‘admin fees’ or sketchy charges.
Ting only charges you Usage + $6 per device + tax each month.
Ting: Mobile that makes sense.
If you’d like to see more TestTube, please click on our episode about the minimum wage
and why we should or should not raise it.
New videos five days a week please subscribe.