David Blanchflower: Facts lost in political wrangling over US jobs

Economic Outlook: The publication of the US jobs numbers caused a firestorm of protest from the right wing

President Barack Obama didn't do very well in Wednesday's first presidential debate, to say the least. He seemed listless and looked like he was sitting back on his pretty comfortable lead in the polls. He didn't even challenge Mitt Romney on his claim – withdrawn the day after the debate – that he wasn't interested in 47 per cent of Americans.

Mr Obama did seem to have the economic argument on his side: Mr Romney was full of promises but no detail. How exactly was he going to create 12 million jobs, given that he was planning to balance the budget? Was he really not going to lower the taxes on the rich?

All along the economy was going to be crucial to the election outcome. The Republicans had been pushing the argument that people were worse off under Mr Obama, given that there had been 43 successive months with the unemployment rate above 8 per cent, which contrasts with the 7.8 per cent Mr Obama inherited in January 2009.

Mr Obama's electoral prospects had already been given a helping hand by the Federal Open Market Committee, which restarted quantitative easing on 13 September, through additional purchases of mortgaged-backed securities (MBS), with the stated intent of boosting the economy.

Some questioned the timing as openly political, given it occurred so close to the election. Maybe it was and maybe it wasn't, but it probably wasn't a smart move by Mr Romney to say that he would not renew Chairman Bernanke's term if he were elected. Central bankers value their independence, and don't take too kindly to being told what to do by politicians.I do recall at one MPC meeting Sir Mervyn King told the Treasury representative that he should tell the Prime Minister, Gordon Brown, to "shut up".

The big deal, though, were the much-awaited Bureau of Labor Statistics (BLS) jobs data published on Friday, just two days after the debate, which really do look like game-changers. The biggest news was the fact that the unemployment rate for September was 7.8 per cent compared with 8.1 per cent in July; the number of unemployed fell by 456,000 on the month. The consensus among economists was that the rate would actually rise to 8.2 per cent.

This, of course, has given a much-needed boost to Mr Obama, who could now counter that the 43-month string had been broken and unemployment was back to where it was when he took office. There was other good news, that people were no longer dropping out of the labour force – what labour economists call a "discouraged worker" effect. The labour force grew by 400,000 on the month. Plus the unemployment rate of African Americans fell from 14.1 per cent to 13.4 per cent on the month. The unemployment rate for high-school drop-outs fell by a similar amount on the month from 12.0 per cent to 11.3 per cent.

Data on the number of jobs are available both from the household survey plus from a survey of employers. The household survey has broader coverage than the employer one and includes the self-employed, unpaid family workers, agricultural workers, and private household workers.

This month it showed an increase in employment between August and September of 873,000, which is the biggest monthly increase since January 2003 and the sixth biggest monthly rise since 1948. The employer survey showed an increase of 114,000 non-farm payrolls, which as the table shows, have increased every month for the last 24 months in a row. Also telling was the fact that job creation in the last two months was revised up by 40,000 in July and 46,000 in August.

The publication of these job numbers just before the election produced a firestorm of protest from the right wing, who suggested the administration had fiddled the numbers. There is zero chance these numbers could have been tampered with.

Jack Welch, former CEO of General Electric, moronically tweeted "unbelievable jobs numbers ... these Chicago guys will do anything ... can't debate so change numbers". My good friend Alan Krueger, distinguished labour economist and now chairman of the White House Council of Economic Advisers, quite rightly told Bloomberg Television that Mr Welch's remark was "irresponsible". Others on the right joined in because they didn't like the answer, including Joe Scarborough, former Republican congresman and now chat-show host, who should know better. Such comments just show how low some partisan people will stoop.

The data on unemployment are collected in the US from a survey of individuals called the Current Population Survey, which is directly comparable to the survey used in the UK run by the Office of National Statistics called the Labour Force Survey.

Currently the latest data we have available for the UK for July shows a rate of 8.2 per cent, up from 7.9 per cent in June. The monthly data for July can only be found by digging deep into the ONS website*. Each month they publish the basically worthless "national statistic", which is a three-month average – currently May to July, standing at 8.1 per cent – which the ONS then compares to February-April, which makes no sense. On 1 October Eurostat published unemployment rates for 27 EU countries plus Israel, Norway, the US and Japan; data for August was available for all but five of these 31 countries; Hungary provided data up to July, while Estonia, Latvia, Greece and the UK were the only countries that could only provide data up to June.

This is humiliating and confusing, and apparently arises because of lack of resources, which needs to get fixed. The UK needs to produce statistics that are comparable to other major western countries, not to former Soviet satellites and a small southern European country in financial difficulties.

What is clear though, whether we use monthly or three-monthly rates, the UK now has a higher unemployment rate than the US, which was not the case when the Coalition took office. In May 2010 the US unemployment rate was 9.6 per cent, compared with 8.1 per cent in the UK. Plus the UK unemployment rate is set to rise again. The British people are clearly worse off than they were when the Coalition took office.



Start your day with The Independent, sign up for daily news emails
Barn owls are among species that could be affected
charity appeal
Sarah Silverman (middle) with sister Reform Rabbi Susan Silverman (right) and sister actress Laura Silverman (left) at Jerusalem's Western Wall for feminist Hanuka candle-lighting ceremony
peopleControversial comedian stages pro-equality Hanukkah lighting during a protest at Jerusalem's Wailing Wall
Arts and Entertainment
The Bach Choir has been crowned the inaugural winner of Sky Arts’ show The Great Culture Quiz
arts + ents140-year-old choir declared winner of Sky Arts' 'The Great Culture Quiz'
After another poor series in Sri Lanka, Alastair Cook claimed all players go through a lean period
cricketEoin Morgan reportedly to take over ODI captaincy
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas