The monthly jobs report tends to engender a lot of conspiracy theories.
During the climax of the 2012 presidential election, the sharp decline in the unemployment rate led Jack Welch – the legendary former head of General Electric – to blindly allege that the numbers were being fixed for President Obama.
It’s correct to be suspicious of the employment figures, but not because of the false suspicions that come from critics of the Obama administration. This is about statistics and monthly hiring data that have a margin of error of plus or minus 100,000 jobs.
The Bureau of Labor Statistics announced Friday that payrolls increased by 165,000 in April, as the unemployment rate ticked down slightly to 7.5 percent. These are estimates. And as demonstrated by the rest of the government report, they tend to get substantially revised.
The revisions in the report overhaul the entire narrative of the U.S. economy. When it was announced almost a month ago that the economy added a mere 88,000 jobs in March – not enough to match population growth – the story quickly became that the economy was starting to shudder from the end of the payroll tax holiday and the start of the sequestration cuts.
After all, the data backed this up.
This story no longer holds.
The BLS amended its figures for March and February, locating 114,000 additional jobs in those previous two months. As a result, the March disappointment becomes a somewhat more satisfactory 138,000 new jobs, while February becomes an explosive increase of 332,000, the highest monthly increase since May, 2010.
Michael Strain, a research fellow at the conservative American Enterprise Institute, summarized the situation on Twitter: “Great news on revisions, good report all around. Recovery steady, but too slow.”