Bob sez...

Bob Barbera explains what's going on with the population numbers. Every January the BLS rebenchmarks the household survey numbers, forcing an adjustment in the population, employment and unemployment numbers for January. But they don't go back and revise the previous months' data in light of this, so you can't really compare December to January. It's possible that this phenomenon is more pronounced in the year after the decennial census. So hidden in the employment report is Table C:



This table says that had the BLS gone back and revised December's data in light of their new population estimates, they would have found that household employment rose by 589,000 in January! That's on top of December's household employment increase of 297,000. These are huge numbers that suggest that the two month decline in the unemployment rate from 9.8 percent to 9.0 percent is not a fluke but a meaningful turn in the labor market (here I'm giving my own opinion, not necessarily Bob's). It may just be that the payroll numbers are, for reasons no one can explain, failing to reflect accurately the true state of the labor market. At any rate the household survey, ADP report, ISM reports, initial claims data, GDP report, not to mention retail sales, durable goods orders, etc. are all telling a different, more positive story than payroll employment.