In this latest installment of The Professor Is In, I break down the biggest myths surrounding the monthly jobs report—responding to subscriber questions and addressing common anxieties found in my comments section.
First up, I explain why strong hiring doesn’t always move the unemployment rate, and what that has to do with a hard-to-measure break-even rate. Next up, I address the recurring claim that these new jobs most be low-paid or mostly second jobs. The truth is, this report simply doesn’t contain enough detail to support those conclusions in real time. However, the sectoral breakdown can offer a few clues.
Then I go deep on the nerdy stuff—revisions, seasonal adjustments and benchmarking—and why none of these are signs of manipulation, but rather evidence that measurement improves as better data arrives. This also helps explain why you shouldn’t expect BLS data to perfectly match the private sector estimates.
I close out this episode by discussing the latest inflation news and what that means for recession watch—the two are related, but not interchangeable concerns. Inflation can make households feel economically miserable without the economy actually being in recession, and public confusion between these concepts can distort everything from consumer confidence to political debate.
