"The fewest numbers you need to know
This morning the Bureau of Labor Statistics reported that in February the U.S. economy created 227,000 net new jobs and the unemployment rate held steady at 8.3%.
We are still 5.3 million jobs shy of peak employment in December 2007 and 864,000 shy of January 2009 when President Obama took office.
Same data, different views
Different audiences look at employment data in different ways:
- People’s lives are most affected by the level of employment: how many people are working and what is the unemployment rate? At 8.3 percent this number is still bad.
- As both a policy and political matter, Washington, DC cares about the level, but even more about the direction and rate of change: are we adding or subtracting jobs, is unemployment rising or falling, are we “headed in the right direction?” From this view today’s report offers good news, at least on the jobs created front. I assume the Administration will cite 17 months of continuous job growth. Possibly more significant is that we have had four months of job growth > 150,000/month, which is roughly what you need to keep up with population growth. The trend continues to be positive, although you should want even bigger numbers since the unemployment rate is still high.
- Markets and market commentators care even more about how the change compares with expectations before the data was released. Today’s numbers slightly exceeded expectations of about 200,000 net new jobs so the reaction from this perspective should also be positive...."
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