Economic expert says new numbers astounding, but not cooked


by MARK WIGGINS / KVUE News and photojournalist JOHN FISHER

Bio | Email | Follow: @MarkW_KVUE

Posted on October 5, 2012 at 6:38 PM

Updated Friday, Oct 5 at 6:40 PM

AUSTIN -- Improved jobs numbers released by the U.S. Department of Labor's Bureau of Labor Statistics show unemployment dropping to 7.8 percent in September down from 8.1 percent in August, statistics the Obama Administration's critics immediately took issue with Friday morning.

"There were fewer new jobs created this month than last month," Republican presidential candidate Mitt Romney told supporters Friday in Virginia. "The unemployment rate as you noted this year has come down very, very slowly, but it's come down none the less. The reason it's come down this year is primarily due to the fact that more and more people have just stopped looking for work."

Some are going further, accusing the administration of "cooking the books" in the final month before the presidential election to show the unemployment rate below eight percent for the first time since President Obama took office. Former General Electric head Jack Welch posted on Twitter, "Unbelievable jobs numbers.. these Chicago guys will do anything.. can't debate so change numbers."

"A lot of people have come out today and said, 'Don't trust that number,'" Fox News Channel host Megyn Kelly claimed Friday. Fox Business Channel host and fellow FNC contributor Stuart Varney alleged "widespread mistrust" of the latest data. Responding to the criticisms in an interview Friday morning on CNBC, U.S. Secretary of Labor Hilda Solis said she was "insulted" by the allegation.

"I think that's an outrageous criticism," said economist and University of Texas Professor Daniel Hamermesh, who served as director of research for the labor department in the 1970s and currently sits on the agency's advisory board. "This happens to be the best people working in staffs in the federal government, incredibly honest. If I were one of them and I heard that accusation, I would be furious, and deservedly so."

The unemployment report includes two important surveys. The first is a payroll survey, which asks about 141,000 businesses how many employees they added. Employers reported adding 114,000 nonfarm jobs in September, down from 142,000 in August. The second survey asks about 60,000 households questions regarding the employment status of those at home. Based on their answers, researches calculated 873,000 jobs were added in the same time period.

Hamermesh says the household survey number is "astounding," but isn't necessarily contradicted by the payroll survey.

"They're different things," explained Hamermesh. "One is the number of jobs, the other is the number of people. Some people may have suddenly been holding one job instead of two, but more important, these are statistics. These aren't population censuses, and they're bound to vary from month to month."

Because the sample size for the household survey is smaller than that of the payroll survey, the result are generally less reliable and more prone to fluctuation. In addition, Hamermesh says September can be "slightly flaky" due to students returning to school and as a result the unemployment number could see additional negative or positive movement next month. That being said, Hamermesh said the number is certainly a good sign.

"These numbers mean something, and they're the most carefully constructed numbers that the federal government does," summed up Hamermesh.

With an election a month away, whether the numbers will make any difference politically will be up to voters.

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