No way President cooked job numbers
This month, for the first time since the start of 2009, the unemployment rate has been below 8 percent. Although many pundits and commentators are celebrating this milestone in the gradual economic recovery we’ve been having, there are certain individuals who have eyed the 7.8 percent unemployment rate with skepticism.
Last week, Jack Welch, a former CEO of General Electric, came out with the theory that the Obama administration fixed the unemployment numbers for political advantage in the month before the election. In an op-ed for The Wall Street Journal, Welch stated that it was highly suspect that the unemployment rate would have dropped from 8.3 percent to 7.8 percent in the span of two months. He did not, however, offer any concrete evidence of any alleged numbers-fixing.
Noted economists, such as Nobel Prize winners Joseph Stiglitz of Columbia University and Paul Krugman of Princeton University, sharply criticized the “jobs-number conspiracy,” and for good reason. Welch’s statements display a deep ignorance of the economic and political realities in the U.S.
Fixing the jobs numbers would be an act of political stupidity on behalf of the Obama administration. The Bureau of Labor Statistics (BLS), which collects economic data on the state of employment, has civil servants with various political affiliations that have worked over many administrations. Its data is available to the public and can be easily verified.
Someone would have blown the whistle if the jobs number had been falsified. It is highly unlikely that President Barack Obama would engage in such an easily discoverable fraud a month before the election. If it did not entirely sabotage his chances for re-election, it would certainly risk a Watergate-esque investigation after Nov. 11.
Secondly, the jobs numbers are not out of line with the data collected in the past year. While the BLS’s estimates of unemployment vary within 0.1-0.2 percentage points each month, they do show a general trend of real — albeit slow — job growth over the last few years. Furthermore, the BLS tends to undercount jobs during recoveries because the survey of employers that they use to determine the rate often does not take into account newly established businesses. This is what happened over the months of July and August, and subsequent BLS revisions to those numbers show that there have been 50,000 more jobs created than previously thought.
For students, the improvement in the unemployment rate suggests real cause for celebration. For once, the rate this month has dropped not because people have stopped looking for jobs, but because there is an actual increase in the number of jobs. Furthermore, there has been an increase in the number of full-time jobs for Americans age age 16–24. Although the future of the economy is still uncertain, these past few weeks have given us something to be optimistic about.