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Why the Jobless Numbers Aren't "Fixed"

The Right’s Outrageous Attacks on the Bureau of Labor Statistics

by LAWRENCE MISHEL
Apparently, Jack Welch, former chairman and CEO of General Electric, is accusing the Bureau of Labor Statistics of manipulating the jobs report to help President Obama. Others seem to beadding their voices to this slanderous lie. It is simply outrageous to make such a claim and echoes the worrying general distrust of facts that seems to have swept segments of our nation.

The BLS employment report draws on two surveys, one (the establishment survey) of 141,000 businesses and government agencies and the other (the household survey) of 60,000 households. The household survey is done by the Census Bureau on behalf of BLS. It’s important to note that large single-month divergences between the employment numbers in these two surveys (like the divergence in September) are just not that rare.

EPI’s Elise Gould has a great paper on the differences between these two surveys. BLS is a highly professional agency with dozens of people involved in the tabulation and analysis of these data. The idea that the data are manipulated is just completely implausible. Moreover, the data trends reported are clearly in line with previous monthly reports and other economic indicators (such as GDP). The key result was the 114,000 increase in payroll employment from the establishment survey, which was right in line with what forecasters were expecting. This was a positive growth in jobs but roughly the amount to absorb a growing labor force and maintain a stable, not falling, unemployment rate.

If someone wanted to help the president, they should have doubled the job growth the report showed. The household survey was much more positive, showing unemployment falling from 8.1 percent to 7.8 percent. These numbers are more volatile month to month and it wouldn’t be surprising to see unemployment rise a bit next month.

Nevertheless, there’s nothing implausible about the reported data. The household survey has shown greater job growth in the recovery than the establishment survey throughout the recovery. The labor force participation rate (the share of adults who are working or unemployed) increased to 63.6 percent, which is an improvement from the prior month but still below the 63.7 percent reported for July. All in all, there was nothing particularly strange about this month’s jobs reports—and certainly nothing to spur accusations of outright fraud.

Of course, this flaming of BLS reminds us of the episode where President Nixon thought that BLS was manipulating the unemployment data and as part of some Jewish conspiracy against him. He sent White House personnel director Fred Malek (more recently, the national finance co-chair of the McCain campaign) to count the Jews at BLS. Tim Noah wrote the story a few years ago. The Washington Post also covered it.  The charges were outrageous then and they remain outrageous today.

Lawrence Mishel is president of the Economic Policy Institute, where this column originally appeared.