Monday, February 4, 2008

Leaping to (probably wrong) conclusions

CNN has already decided that there's going to be a jobless recovery, "again." You remember, just like that last jobless recovery? The one that turned out to add lots and lots of new jobs?

Yes, it did. It wasn't really jobless at all. The employment statistics are mostly estimated based on what's happening at large companies. Smaller companies and new companies tend not to get sampled sufficiently; that's why the early numbers are always subject to revision, sometimes as much as a year later. And the later revisions showed that the "jobless" recovery wasn't jobless at all; it's just that most of the new jobs were added by smaller businesses, those with 50 or fewer employees, so didn't show up in the early statisitcs; it wasn't until the numbers were revised with more complete information, much after the fact, that the truth became known. By which time, of course, it was (literally) last year's news, so was ignored by the media.

I see no reason to expect any current "jobless" recovery to be any different. I'm willing to be proven wrong, but in this case using the latest statistics is actually one of the weakest arguments.

Oh, by the way, welcome to post #200.

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