Today’s jobs numbers are a bit of a Rorschach test: You can read them to say either good or bad things about where our economy is headed.
The headline coming out of this morning’s job report is a clear and very optimistic one: Unemployment has dropped to 8.6 percent, its lowest level since March 2009, as the economy added 120,000 jobs in the past month.
Moreover, we’re adding significantly more jobs than we initially estimated. The Bureau of Labor Statistics today revised October’s jobs report upward by 72,000 jobs, making this the fourth straight month where we’ve seen more job growth than initially reported.
Recent revisions to jobs numbers give even more reason for optimism. Politico’s Ben White posts this helpful chart, from Hamilton Place Strategies, that shows how much jobs numbers have been tweaked. All told, the Bureau of Labor Statistics have added 231,000 more jobs to their initial estimates just over the past three months:
But there’s also a glass-half-empty interpretation of today’s jobs numbers. As the New York Times’ Binyamin Applebaum tweets, the unemployment rate is a bit of a “silly metric.” It’s calculated by dividing the number of unemployed people by the size of the workforce, where an “unemployed person” is defined as an individual activity seeking work but not finding it. It excludes anyone who isn’t actively seeking work — a population captured by the labor force participation rate. And when it comes to that indicator, things don’t look as good. Over the past month, the labor force participation rate dropped from 64.2 to 64 percent, indicating that fewer Americans are looking for work and simply giving up on their searches.