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Are today's jobs numbers real?
Correction: The original version of this story incorrectly identified which portion of the Labor Department’s monthly jobs report is revised. The establishment survey is revised, the household survey (which contains the unemployment rate) is not. The text below has been corrected.
Are today's jobs numbers real? In a word: no.
The news that the jobless rate has dropped to 7.8 percent has set off a firestorm of protest from Republicans. Right-wing pundits, Representatives and gadflies are insisting that Obama or his cronies in the Bureau of Labor Statisitics and the Federal Reserve have cooked the books, to cut the unemployment rate to match Obama's promise to get it down below 8 percent.
But here's the news: We have no clear idea how many Americans are really unemployed.
The BLS announcement today incorporates two pieces of news. First, that non-farming companies reported that they added 114,000 people onto their payrolls in September. Second that a household survey conducted by the BLS indicates that the number of jobless in the US dropped to 7.8 percent.
The BLS household survey is a one-shot thing. So that 7.8 percent number is a snapshot of what the 60,000 households interviewed by the Census Bureau say. The report from companies, on the other hand, is checked more than once. And it almost certainly will change. We won't get a more accurate count until the revised number comes out in a few weeks. As you can see from the animated GIF below, it may be higher; it may be lower. But it won't be the same.
It never is.
How did boring old mortgages get us into so much trouble?
The New York Times was kind enough to post part of my new book, Man vs Markets on the Bucks Blog today.
The excerpt comes from a chapter in which I talk about the creation of asset-backed securities and their various toxic permutations. They entitled it The Boom and Bust That Your Mortgage Bonds Built. Very catchy!