The numbers for August bear out this statement. The US
reported a nonfarm employment increase of 169,000 in August. The initial report
for July showed an increase of 162,000 jobs that was revised in the latest
release down to 104,000.
For Georgia, the state showed a sudden leap of 30,900 jobs
in preliminary numbers for July. Not only was this quick rise unexpected; if
true, it meant that Georgia created 1 out of every 5 jobs in the country in
July, an unusual event for a state that has been keeping just above national
job growth numbers.
It appears that the adjustments were not due to true “errors”
but to the vagaries of seasonal adjustment. August is a difficult month to
seasonally adjust as school systems continually change their opening dates,
thus affecting employment levels in their systems.
The revision just shows that seasonal adjustment is not a
precise science, but an art.
In past years, it might have been possible for someone at
the Georgia Department of Labor to adjust the adjusted numbers before they were
reported, so as to prevent these sorts of jumps and retreats. But the Bureau of
Labor Statistics has had a policy of taking people out of the adjustment
process and depending instead on computer programs.
This policy change was out of a concern that individuals
biases might affect the numbers. It is also true that adjusting the numbers is
a delicate maneuver and required great experience with the underlying databases
to get the adjustment correct.
With retirements of experienced people both at the BLS and at the Georgia Department of Labor along with personnel policies that may be discouraging some of the brighter minds from going into public agencies, there are fewer folks that have this
level of expertise and have spent the years with the data to make these delicate adjustments correctly.
Instead, we put our faith in unflinching computer programs
that work without bias, but also without an instinct for the data. Unfortunately, for the reasons given above, there is no going back to the older ways.
As for the news reports, in all, the 169,000 job increase, termed “disappointing” in
some news reports is an unfair characterization of the data. The numbers show an economy recovering, although at a slow pace. The US
economy is recovering, even if at a slower pace than many would wish. This slower than expected recovery may be with us through most of 2014.
With the release of the August national data, we can now expect
downward adjustments in Georgia’s July numbers also. The July revised numbers
plus the August preliminary data, when it is released, should show the state on
its steady upward trajectory slightly faster than the US but by no means a
standout among states.
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