People seem to think that there was a jobs apocalypse on Friday, but was there really? Looking at FRED’s PAYNSA data series, we see that the economy added 789,000 jobs. So, why the stock-market plunge? Well, just about all of those new jobs got seasonally-adjusted away.
However, there is controversy about the seasonal adjustments. According to the Wall Street Journal:
“In April, Federal Reserve Chairman Bernanke said that the ‘seasonality issues that have arisen because of the unusually large recession in 2008 and 2009’ were making economic data more difficult to interpret.”
But we can look at the data without making any seasonal adjustments. All that we have to do is use year-long time periods. For example, we could ask: How many jobs were created during the year ending May 31st? Answer: 1.84 million. And what about the year ending April 30th? Answer: 1.70 million.
Looks like an improvement, right? Well, that’s exactly what it is. Here is a chart that I made using PAYNSA showing job-growth over the trailing year (click chart to enlarge):
As you can see, the May 2012 bar is the fourth-best of the recovery. So, I think that it’s safe to say that Jobs-Ageddon has been over-hyped.
Of course, there is still the matter of financial chaos in Europe…