The Bureau of Labor Statistics report on preliminary unemployment data is released on the first Friday of each month. This report provides scant information about the state of the economy, but it is widely anticipated and reported, even more so during a hotly contested election season. It is useful to explain what it does and does not tell us.
To begin, I wish to dispel the myth of a conspiracy about rigged unemployment numbers. I have two reasons to know that these data are not contrived. The first is simply that I know the federal government struggles to keep a secret.
Moreover, the real reason I know these numbers to be true is that if the administration could pull off a secret of this nature, then it would surely make up better numbers. The fact is the current economy is in poor and worsening shape, and the drop in the unemployment rate reported last week hardly masks that fact. Here’s why.
The National Bureau of Economic Research declares a recession while looking at four data points: industrial production, real incomes, employment and retail sales. The recession dating is a judgment call, but as it stands now, three out of four of these measures are lower now than at the beginning of summer. Only employment continues to grow, but there is nuance to this story.
We have about 310 million Americans alive today, with about 155 million actively in the labor force. This is a smaller share than any time over the past three decades for many reasons: aging baby boomers, adults in school, exploding disability, and other reasons.