January 4, 2013
Concluding a Strange Season for Employment Data
An unanticipated (unprecedented) leap in employment just prior to this year's presidential election brought the Current Population Survey (CPS) data from the Bureau of Labor Statistics (BLS) an unusually high degree of technical scrutiny. As I've been noting, the seasonally adjusted and unadjusted results have been a bit peculiar. With data from December now available, the BLS concluded the year by changing five years' worth of seasonal adjustments and announcing changes that will make subsequent years "not directly comparable" to anything that came before.
For the final month of the year, the "headline" unemployment number, which is the percentage of people in the labor force who say they are actively seeking work, held at 7.8%. Two frequently highlighted considerations are that, one, certain demographic groups are way above that percentage and, two, the rate would be significantly higher if the American labor force hadn't slowed its pace. If the labor force of the last five years had continued to grow at the rate of the prior five years, the unemployment rate would be 8.6%.
But it's the difference of seasonal adjustment that illustrates the peculiarity of this year.