Newspaper article The Christian Science Monitor

A Look at Bright Side of the US Economy

Newspaper article The Christian Science Monitor

A Look at Bright Side of the US Economy

Article excerpt

THE United States economy is stronger than Democratic presidential nominee Bill Clinton, or his acolytes in the fourth estate, would have you believe.

News organizations reported that "government figures showed ... American business and industry lost 167,000 jobs in August." That was false. Business and industry added 99,000 jobs last month - 85,000 in manufacturing, 25,000 in services, partly offset by small drops in mining and construction. Labor Department statisticians judged these increases to be less than normal. Therefore, the department said that on a seasonally adjusted basis, private jobs dropped 167,000. Businesses did not "lose jobs;" they hired fewer people than usual.

The August jobs report was clearly weak, despite the rise in jobs and a small drop in the unemployment rate. The main measures of employment - civilian workers, adult workers, full-time workers and payroll jobs - all posted modest seasonally adjusted declines last month. However, even with the August drop, the number of nonfarm workers rose 1.3 million in the past year. In 1993, nonfarm employment should go up another 2.4 million. Teenage jobs may continue to go down because of side effects from the sharp increase in the minimum wage in 1989 and 1990.

Reporting of economic news is a complex affair. To track the daily activity of more than 250 million individuals in the world's richest economy requires abstract measurements often far removed from the realities of daily life. As was the case with last month's job report, the alchemy of seasonal adjustment routinely transforms ups into downs and vice versa. Opportunities for bias and distortion are endless. A slanted story is hard to detect. By sending a garbled message, news people have helped ensure inappropriate policy responses. The Labor Department regularly publishes alternative statistics for nonfarm employment. The government bases one measure on the Census Bureau's monthly sampling of US households. This survey tabulates the number of workers, and is the source of the figures the Labor department uses to calculate the unemployment rate.

The Bureau of Labor Statistics also surveys more than 300,000 business establishments each month. …

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