Why September's Unemployment Number is Suspicious

The Bureau of Labor Statistics said the unemployment rate dropped from 8.1% in August to 7.8% in September, after having been over 8% for the previous 43 months. In fact, this latest figure puts the unemployment rate exactly back to where it was in the month of President Obama's inauguration. On its face, that is not necessarily suspicious. First, the rate had been trending downward since reaching its peak in October 2009. And a drop of 0.3 percentage points is not unprecedented. In fact, since 1948 it has dropped at least that much 63 times, including as recently as January 2011. The change in total non-farm jobs in the Establishment Survey was also in line with expectations. The "expert" consensus was an increase of about 111,000. My own prediction was 99,000. The BLS figure was 114,000 -- not all the different from expectations. The seasonal adjustment to the employment level used in the unemployment rate calculation was also not out of line. The adjustment to the employment level...(Read Full Post)