The Flinchum File

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Laboring In Confusion

In my last column for Inside Business, I wrote that I have never had less confidence in economic reports on employment.  No, it is not some conspiracy inside the Bureau of Labor Statistics to deceive the American people.  Instead, the pandemic has scrambled our workforce, and that is reflected in our economic reports.  For example, the latest monthly “jobs report” indicated that we produced 467 thousand non-farm jobs, but I am suspicious.  That report also found an additional 709 thousand jobs were created over the last two months . . . but nobody noticed.

The “jobs report” has always taken information from (1) calling residences to see if they were working and (2) aggregating labor reports from businesses.  The pandemic has caused definitional confusion about whether a person is employed or not, whether a period of unemployment is permanent or temporary, even whether a person has sick leave or not.

Clearly, the labor market is getting stronger and stronger.  That’s enough to know for now.  We can quibble later.  However, the significance of this report makes it virtually certain the Fed will raise interest rates next month to cool off the economy.  The war on inflation begins then!