Kim Priestap noticed some good news about the economy and the deficit, and she could be forgiven if it did not include more good news, because it was buried. But Russell Roberts in Cafe Hayek noticed:
At the very end of the article, in the very last paragraph, in the very last sentence, comes the truly newsworthy part of the article. Here’s the last paragraph:
The good news was that job gains for both July and August turned out to bigger than previously estimated, taking some of the bite out of September’s figures. The report also showed that job growth during the 12 months ending in March may have been 45 percent higher than previously reported. The Labor Department said payrolls for the 12 months that ended in March 2006 will be revised upwards by a whopping 810,000 jobs, the biggest revision since 1991.
I like that word “whopping.” The Post reporter, Daniela Deane, realizes that an average monthly error over 12 months of 67,000 jobs is an incredible error.
These revisions are because the Bureau of Labor Statistics establishment survey is a sample of existing businesses that has trouble capturing some sources of new job growth–small businesses and the self-employed. The BLS household survey which used to move roughly in parallel as a measure of job creation has been diverging wildly from the establishment survey. The pessimists quotes the establishment survey. The optimists quote the household survey. Revisions of this size suggest the optimists had a point.
So all those articles in the newspaper over the past 12 months, about “disappointing” job growth being less than predicted, were wrong. Every time they said that job growth was “only” 128,000 per month, were wrong by an average of 67,000 jobs a month. Good news, buried.