The U.S. economy lost 1.2 million jobs between June and July. But that’s not how it got reported. When the Bureau of Labor Statistics released its jobs figures for July, it said the economy gained 163,000 jobs. So what gives?
It all has to do with what’s known as “seasonal adjustments.” The U.S. economy follows certain predictable patterns in hiring and layoffs. School districts always let workers go for the summer and hire in the fall. Retailers always staff up for the Christmas holidays and lay people off afterwards. Students always flood the labor market in June.
So if we want to know how well the economy is doing, we want to know how many jobs were added after taking these predictable fluctuations into account.
This is exactly what BLS does in its monthly jobs reports. As Jacob Goldstein of Planet Money points out, the U.S. economy lost 1.2 million jobs (pdf) between July and June. But, according to the bureau, the economy essentially lost 163,000 fewer jobs than one would’ve expected, given seasonal trends. That’s a sign of a (slowly) recovering labor market. So BLS reported it as a 163,000 gain in jobs.
(Excerpt) Read more at washingtonpost.com ...
