We’re talking about… Jobs?
The Bureau of Labor Statistics (BLS) releases a monthly jobs report that is widely used to gauge the health of the economy. However, there are a number of reasons why this data is flawed.
How the BLS captures the survey data:
The BLS collects jobs data through two surveys: the Household Survey and the Establishment Survey. The Household Survey is a random sample of households in the United States. The Establishment Survey is a survey of businesses.
The Household Survey is used to estimate the number of people employed, unemployed, and out of the labor force. The Establishment Survey is used to estimate the number of jobs created or lost each month.
Flaws in the jobs data:
There are a number of flaws in the jobs data, including:
The Household Survey is based on a small sample size. The Household Survey is a sample of 60,000 households. This is a relatively small sample size, and it can lead to inaccurate estimates of the unemployment rate and other labor market indicators.
The Establishment Survey is based on a survey of businesses. Businesses are not required to respond to the Establishment Survey, and this can lead to undercounting of jobs.
The jobs data is subject to seasonal variation. The number of jobs created or lost each month can be affected by seasonal factors, such as the holiday season.
The jobs data does not include all types of work. The jobs data does not include people who are self-employed or who are working in the gig economy.
Why the jobs data is misleading:
The jobs data can be misleading for a number of reasons. First, the data is based on a small sample size, and this can lead to inaccurate estimates of the unemployment rate and other labor market indicators.
Second, the data is subject to seasonal variation, and this can make it difficult to compare data from one month to the next.
Third, the data does not include all types of work, such as people who are self-employed or who are working in the gig economy.
The BLS jobs report is a valuable tool for understanding the economy, but it is important to be aware of the flaws in the data. The data is based on a small sample size, it is subject to seasonal variation, and it does not include all types of work.
The jobs data is often used by politicians and policymakers to promote their own agendas. For example, a politician who is running for re-election may point to a strong jobs report as evidence that they are doing a good job. However, it is important to remember that the jobs data is just one data point, and it should not be used to make sweeping conclusions about the economy.
It is also worth noting that the jobs data is often revised after it is initially released. This is because the BLS needs time to collect more complete data. As a result, it is important to be cautious about interpreting the jobs data immediately after it is released.
Overall, the jobs data is a valuable tool, but it is important to be aware of the flaws in the data and to interpret it with caution.
