Why Today’s Unemployment Report Should Be Taken With A Grain of Salt

Three times today I’ve been asked on media outlets about the likely effect on the presidential election of Friday’s jobs report, depending on what the Bureau of Labor Statistics announces.

Unfortunately, the BLS report is likely to sway some voters — and therefore have an impact on this tight race. But it shouldn’t.

The report surely will be used by one of the candidates to make a sweeping case for himself and against his opponent. An unemployment rate above last month’s 7.8 percent, or a number of new jobs below September’s 114,000, will be wielded by Mitt Romney as evidence the economy is slowing – while a rate below last month’s, and a number above it, will be used by Team Obama as evidence the economy is moving in the right direction.

In truth, no one should base their vote on tomorrow’s labor report is because a single month’s report isn’t a reliable gauge of which way the economy is heading. A report that the unemployment rate is 7.8 percent, for example, means only that the Bureau of Labor Statistics is 90 percent sure the real rate lies between 7.6 percent and 8.0 percent. By the same token, an announcement that the economy created 100,000 jobs in October means the BLS is 90 percent sure the number of new jobs is between 90,000 and 110,000…

Choosen excerpts by JMM from

via Robert Reich (Why Tomorrow’s Unemployment Report Should Be Taken With A Grain of Salt).