In the Two Minute Drill, we explain complex issues in politics in 250 words or less (roughly the amount of words it takes the average adult two minutes to read on a monitor). Politics just isn’t always that complicated. Without the fluff and partisan bias, even the most complex of our political differences can be explained succinctly. This week: how not to be misled by the jobs report. This is The Two Minute Drill for Friday, May 2, 2014.
The latest jobs report from the Bureau of Labor Statistics (BLS) quieted fears of another spring slowdown and revived hopes for faster growth for the rest of this year. According to the BLS, the U.S. economy added a bigger than expected 288,000 jobs in April, while the jobless rate dropped from 6.7 percent to 6.3 percent. It’s easy, however, to be misled by the headline grabbing numbers. Jobs reports are really, really hard to read. Here’s how you can avoid being misled.
The Explanation (250 or Bust)
Pay attention to these four critical numbers.
First, look at the change in “nonfarm payroll employment.” Ignore the “nonfarm” part. Just pay attention to the number. In April 2014, the economy added 288,000 jobs. That looks good, but you can’t look at it in a vacuum, you need to compare it to something else: The number of people who entered the workforce. To break even on jobs, we need to add as many jobs as we’ve added people. To cut into unemployment, we need to add more. In April, the number of new entrants was 126,000.
Second, look at the unemployment rate. People are classified as unemployed if they don’t have a job, have actively looked for work in the prior four weeks, and are currently available for work. In the latest report, the unemployment rate was cut from 6.7 percent to 6.3 percent. The best reason for the increase is that we added more jobs than we did people; but another reason is that a bunch of workers without jobs stopped looking.
Third, look at the labor-force participation rate. This number gives you insight into the reason why the unemployment rate changed. The participation rate fell by 0.4 percentage point to 62.8 percent in April – that means that roughly 806,000 people dropped out of the labor force.
Fourth, look at the revisions to recent reports. Those numbers are stark reminders that when these reports are released, we all actually know a lot less than you might think.
Word Count: 249
The Five Best Things We’ve Read This Week
Here are the five most interesting articles we’ve read this week:
- “He was discriminating against black and Hispanic families for years, preventing them from getting housing. It was public record. We did nothing. Suddenly he says he doesn’t want his girlfriend posing with Magic Johnson on Instagram and we bring out the torches and rope. Shouldn’t we have all called for his resignation back then?” Basketball legend Kareem Abdul-Jabbar in Time: Welcome to the Finger-Wagging Olympics.
- “6:39 PM – Inmate tries to talk. Says man and appears to be trying to get up. Doctor checks on inmate. Female prison official says, ‘We are going to lower the blinds temporarily.’ Prison phone rings. Director of Prisons Robert Patton answers the phone and leaves the room – taking three state officials with him.” From The Atlantic: How Oklahoma’s Botched Execution Affects the Death-Penalty Debate.
- “Get ready to crawl into a hole, forever: Gonorrhea, urinary tract infections, and pneumonia are just some of the infectious diseases that are becoming resistant to antibiotics.” From The Wire: The ‘Post-Antibiotic Era’ of Drug Resistant Disease Is Almost Here.
- “They don’t have time to write out and rehearse every body slam, clothesline, and Irish whip. In some cases, the two wrestlers will know who’s supposed to win, how long the match is supposed to take, and then plan out with their opponent the sequence of three or four moves that will make the finishing montage, ending with the pin (1-2-3), the count-out, the disqualification, or general mayhem.” From The Week: Here’s What a pro-Wrestling Script Looks Like.
- “Along a desolate stretch of the Avenue de France, the Red Cross has operated an on-demand, white-gloved sanitation service that, within an hour of being called, will show up to collect human bodies, whether chopped up or left intact.” From The New Republic: Hell Is an Understatement a Report from the Bloody, Crumbling Central African Republic.
And in case you missed it, check out The Weekly Column. This past week took a look at the growing evidence suggesting that from genes to hormones, biology may help shape political behavior. Read the Column – The Biology of Political Belief.