“Was 2015 the best year ever for employment in Indiana?” That was the question asked by Don Doom as his wife, Doris, put the kids to bed.
“First,” I replied, “we need to have the December employment figures. Second, what do we mean by employment?”
“What are you talking about?” Don demanded.
“Sorry, but that’s the way it is,” I said. “The U.S. Bureau of Labor Statistics takes a survey of larger employers and counts the number of jobs. At the same time, the U.S. Bureau of the Census surveys households and counts the number of persons employed. The numbers will never come out the same. For example, a person may be self-employed and not work for an employer. Or she or he may work part-time in two different jobs.”
“Well, how different are those numbers?” Don asked.
“In Indiana,” I recited from memory, “over the past 25 years, the difference has been as high as 203,000 in 1995 and as low as 4,600 in 2012 — averaging 93,700 or 3.4 percent. The number employed (Census) always exceeds the number of jobs (BLS).”
“Which leaves me still wondering, was 2015 our best year ever?” Don said.
“I think 2015 will be the highest level in our history for the number of jobs at 3,044,000 which will top our 2000 level of 3,004,000. That would be a gain approaching 64,000 or 2.1 percent over 2014.”
“That would be great,” Don said.
“That would be very good,” I agreed. “Yet, it would still trail Indiana’s annual gains averaging 77,700 made in 1993-95.”
“Well, you’re not taking much of a chance forecasting the full year with only the last month missing. By-the-way, didn’t I hear the December U.S. job numbers are all fouled up?” Don asked, changing from the state to the national level. “Seems the seasonal adjustment is way off.”
“You’ve been reading the statistical underground reports again?” I asked.
“Yeah,” he replied. “David Stockman claims we saw only 11,000 new jobs nationally in December, but the Labor Department reported a gain of 292,000 after seasonally adjusting the numbers. How does 11,000 become 292,000? Is the administration cooking the numbers?”
“There are lots of questions,” I answered, “about how statisticians adjust the data for variations that occur regularly according to the seasons. December was particularly hard to adjust in 2015. The weather was much warmer than usual and on-line retail sales are continuing to disturb the patterns of the past.”
“So the big gain in jobs was a phony to make Obama look good?” Don declared.
“No,” I said. “The federal statistical system is probably the least political set of agencies you can find anywhere. The December numbers are just preliminary. The data will be revised as more firms report and the seasonal factors are updated.”
“When do all these revisions stop?” Don asked.
“I know,” I sympathized. “We’re dealing with economics not the weather where the temperature in New Castle at 3 p.m. yesterday does not get revised.”