By Dr. Joe Webb on March 9th, 2007
There are several issues the press is missing. The unemployment rate dropped to 4.5%, but the unemployment rate is actually hovering around 4.55%. Because the Bureau of Labor Statistics does not report in hundreths of a percent, if it goes to 4.54%, it is reported to be 4.5%, and if it goes up to 4.56%, it is reported as 4.6%. The key phrase in the BLS press release is “essentially unchanged.” Much is being made of the payroll survey being up +97,000, and some +40,000 revision to the January payroll data. The household survey, however, was down -38,000. Throughout the recovery, and before, this was always quite strong. This counts non-payroll jobs, such as self employment. Wages were +4.1% and this is further confirmation to the Fed that there are problems brewing, since this is well above the increases in productivity that are needed to pay for the increases without being inflationary. No, this is not as good as the press would lead one to believe.