Economy
1:54 pm
Fri May 3, 2013

Jobs Report Better Than Expected, But Still Not That Great

Originally published on Fri May 3, 2013 6:28 pm

Transcript

MELISSA BLOCK, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block. The unemployment rate edged down a tiny bit today to 7.5 percent. That's the lowest it's been in more than four years. In addition, the Bureau of Labor Statistics reported there were 165,000 net new jobs in April. This was better than most economists expected. Even better, the government said it had undercounted in February and March by more than 100,000 jobs.

We've asked Adam Davidson with NPR's Planet Money team to dig into these numbers. And, Adam, what's your takeaway from today's report?

ADAM DAVIDSON, BYLINE: Well, unfortunately, it's exactly what I've been saying for far too long: better than expected, way worse than it should be. A hundred and sixty-five thousand jobs, that's a lot better than negative, and for months and months now, we expect that there will be more jobs each month than the previous month and so that's good. That means we are in something of a recovery.

But that being said, about 150,000 people enter the workforce each month and so we need 150,000 new jobs just to keep up with population. Remember, we still have nearly 12 million Americans who are out of work, over 4 million of them have been out of work for six months or longer. This is still a real crisis, and we need hundreds and hundreds of thousands of new jobs each month to really feel like we're in a healthy, robust recovery.

And so we're very far from that, although, on the bright side, we did not only get a better than expected month, the government went back in time and said the previous two months were also better than expected by about a total of another 114,000 jobs.

BLOCK: That's right. They said in February and March, well, you know, we undercounted. The number should have been better than we said. So how do you account for that? Why are the statisticians wrong so often and we have these revisions a month or so after the fact?

DAVIDSON: I have to say I'm a huge fan of Bureau of Labor Statistics statisticians. What they do is conduct two massive surveys every month. One of them, they contact about 100,000, maybe more, businesses, huge businesses, tiny businesses, government agencies, and they ask them a series of questions. How many people have you hired? How many people have you fired?

And unfortunately, some of those businesses don't get their surveys in on time and so the staff economists, the staff statisticians have to take a guess and try and figure out what they think those surveys are going to say and that's what's put into this report. At the same time, a different group of statisticians are conducting a survey of more than 50,000 households, asking the same sorts of questions. How many people in this household have a job? How many got a new job? How many lost a job? That sort of thing. So the report we get today is a combination of both of those surveys.

BLOCK: So they're reporting the data before they have all the data. Could they wait? Why do they have to do it when they do it?

DAVIDSON: You have to realize, there are thousands, tens of thousands, maybe hundreds of thousands of people desperate for this information: government agencies, the Federal Reserve. They want to know what is the employment picture so they can set government policy. Lots and lots of private companies are desperate for this information.

You know, if you think of like Ford Motor Company deciding how many cars are we going to produce next year, how much steel should we be buying right now, they want to know what the employment picture is so they have a sense of how many people are going to be buying cars. So there's this real deep hunger for the information as soon as possible.

At the same time, of course, the Bureau of Labor Statistics wants to get it right. So what they do is they release this early report. They do tell everyone this is an initial report, maybe you shouldn't take it too seriously. But, of course, we all do take it very, very seriously. Then they revise it over the next two months, and so by three months it is the final report.

BLOCK: Well, Adam, when you step back from the methodology here, what do you think is the bigger picture that's painted by these numbers?

DAVIDSON: What really struck me reading the in-depth details in this report is that this is a really different employment crisis, depending on who you are in America. It is a much better picture for women than for men. The unemployment rate among women is 6.7 percent so substantially lower than it is for men. The unemployment rate for young people, for people between 16 and 20 is massive.

It's almost 25 percent. And then the education breakdowns, as they have been for a long time, are really striking. For people with a BA or higher, the unemployment rate is 3.9 percent. That's actually a pretty healthy economy. Whereas for people who are high school dropouts, it's over 11 percent. And you see this in the sectoral breakdowns as well.

Professional services, educated people like lawyers and accountants, they're doing really well. Health care is doing well. Retail sales is doing well. That's good for women. Construction, manufacturing, they're just flat, which is bad news for men, especially men without BAs.

BLOCK: That's Adam Davidson with NPR's Planet Money team. Adam, thank you.

DAVIDSON: Thank you, Melissa. Transcript provided by NPR, Copyright NPR.