I have noted for quite a while (previous NB-posted examples are here, here, and here) that the business press, led by AP, has repeatedly and erroneously reported seasonally adjusted job gain or loss figures from the government as if they reflect what actually occurred on the ground.
That has usually given reporters like Aversa and other free rein to pretend that real jobs were "slashed" and "vanished" -- even in months where there have been actual but less-than-satisfactory job gains.
Seasonally adjusting the numbers smooths them out, and is a perfectly defensible statistical technique. But anyone who understands what is going on would have to know that since today's seasonally adjusted 533,000-job loss for November was much worse than October's loss of 320,000, something very ugly must have occurred during the most recent month.
You will see that this is indeed the case. But first, let's to go to portions of Aversa's 12:41 p.m. take (saved here for when AP's dynamic link changes) on today's employment report:
Skittish employers slashed 533,000 jobs in November, the most in 34 years, catapulting the unemployment rate to 6.7 percent, dramatic proof the country is careening deeper into recession.
The new figures, released by the Labor Department Friday, showed the crucial employment market deteriorating at an alarmingly rapid clip, and handed Americans some more grim news right before the holidays. The net loss of more than a half-million jobs was far worse than analysts expected...... The loss of 533,000 payroll jobs was much deeper than the 320,000 job cuts economists were forecasting. The rise in the unemployment rate, however, wasn't as steep as the 6.8 percent rate they were expecting. Taken together, though, the employment picture clearly darkening.
The job reductions were the most since a whopping 602,000 positions were slashed in December 1974, when the country was in a severe recession.
This time, Aversa understated the pain in at least two ways.
First, she failed to note the accelerating level of seasonally adjusted job losses, saying only in non-excerpted text that the economy has lost 1.9 million jobs since December of last year. But almost 2/3 of this year's seasonally adjusted lossses have occurred during the past 3 months, and over 80% during the past 6:
Second, she ignored the the not seasonally adjusted actuals, where things look even worse. November 2008's result of 634,000 jobs actually lost was a whopping 947,000 worse performance than November 2007's 313,000-job gain:
The seasonally adjusted numbers in the first chart have come in negative for almost a year because monthly gains that have occurred have trailed previous years' gains, and months with job losses have had worse losses. These seasonally adjusted numbers have progressively gotten worse as the gaps between this year and previous years have widened.
Based on my review of Bureau of Labor Statistics data (start here, and select the tables listed on the first line labeled "Total Nonfarm"), the negative swing of 947,000 from November 2007 to November 2008 appears to the worst one month year-over-year turndown since World War II (to be fair, other negative swings in the distant past are probably a higher percentage of the labor force at the time).
As I said earlier today at BizzyBlog about what Nancy Pelosi, Barack Obama, Harry Reid, and the Democratic Party have done to this economy during the past six months:
It’s simply amazing what promising to choke off a country’s energy supplies (all three of them did so in June), promising to radically raise taxes (Obama did, and the others have been on board, for at least 18 months before the presidential election), and having a decades-in-the-making wreck of the housing and mortgage-lending industries come to a head (a Democratic Party group effort going back to the late 1970s) can do.
The record November decay, obfuscated by Aversa's refusal to go beyond the seasonally adjusted numbers, has yet another cause. Something must have happened in late October and early November to have made things even worse. I wonder what that possibly could have been?
