But the Recession Is Over

Floyd Norris in the New York Times points out the almost routine errors in projecting unemployment figures. Today’s jobless numbs came in at 260,000, far worse than even the most pessimistic estimate.

Watch for the backward revision coming in February 2010, it should be a real beauty.

In early 2008, a small band of people were arguing that we were in a recession. But the conventional wisdom — including at the Federal Reserve — was that the employment numbers said otherwise.

I remember people saying things like “you don’t go into recession when you are losing 60,000 jobs a month.”

They were right. It was the job numbers that were wrong.

The Bureau of Labor Statistics said today that it now thinks the economy lost 824,000 more jobs from April 2008 to March 2009 than it had previously estimated. That is an increase of more than 17 percent. Those numbers will not go into the official figures for several months, but I estimated monthly numbers assuming that 17 percent rate was constant during the 12 months.

Then I looked back at the first estimates released by the Labor Department for each month’s job loss.

Since December 2007, when employment peaked, the economy has lost 8 million jobs, including those 824,000. But the first estimates released each month — the ones that get the headlines — added up to less than 6 million.

Here are the monthly averages for each half year, as first reported and as they now appear to have been.

January-June 2008: Original report, -49,000 jobs a month.
Current estimate, -146,000 jobs a month.

July-December 2008: Original report, -265,000 a month.
Current estimate, -445,000 jobs a month.

January-June 2009: Original report, -544,000 jobs a month.
Current estimate, -619,000 jobs a month.

July-September 2009: Original report, -242,000 jobs a month.
Current estimate, -256,000 jobs a month.

I suspect that the government and the Fed would have started trying to stimulate the economy much earlier had they had more accurate job figures.

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