Tags: Employment | jobs | Obama | November

Fudging Employment Data Will Boost Obama in November

By    |   Wednesday, 18 July 2012 08:14 AM

On Nov. 2, 2012, the Bureau of Labor Statistics will report that thousands of jobs were created in October, adding to gains seen in the previous month’s report. Four days later, Americans will vote and some will certainly be influenced by a favorable employment report.

This boost to the re-election prospects for President Barack Obama will not be the result of a conspiracy among economists. It will result from the impact of adjusting the data for seasonal factors. One seasonal factor this process accounts for is the start of the school year in September.

If this year tracks the historical record, we should expect to see at least 30,000 jobs added for teachers in the days before the election. Additional gains will help lower the unemployment rate announced in the first days of October.

October is also a month the BLS assumes is a good month for job creation. Every month, they estimate the number of jobs that were created in small businesses, and October is among the highest of the year. It could top 200,000 this year if it follows the trend.

In a healthy economy, all these estimates and adjustments might not matter much. But in June, only 80,000 jobs were created. In October, this number should be higher based solely on sharp pencils wielded by government economists and seasonal factors.

The weekend before the election, the headlines should deliver good news about a drop in the unemployment rate. Months later, these gains will disappear when the regularly scheduled revisions are announced. Unfortunately, there are no “do-overs” if the election is decided because of faulty estimates.

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Wednesday, 18 July 2012 08:14 AM
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