Job Growth May Be Better Than It Seems

Tomorrow’s jobs report will probably look bad, as Catherine Rampell explains. The bad headlines news could be just a mirage — if the private sector adds a lot of jobs (say, 150,000 or more) while the Census cuts a lot of jobs. Or the report may actually be bad — if private-sector job growth was as weak in June as it was in May (41,000) and the recovery seems to be stalling.

Whatever happens tomorrow, though, it’s worth keeping something in mind: The official government statistics are probably understating job growth right now.

That tends to be the pattern after recessions end. As the economy is starting to add jobs again, the Bureau of Labor Statistics understates job growth. And the opposite happens during recessions. Then, the government understates job losses.

The chart below shows the revisions — that is, the difference between the initial estimate and the final number — in the bureau’s payroll employment statistics. You’ll notice that the numbers tend to be negative when the economy is losing jobs (1990-91, 2000-03, 2007-09) and positive when the economy is gaining jobs.

For example, in August 1990, at the start of a recession, the government’s initial jobs report estimated that the economy had lost 75,000 jobs; the final numbers showed that the economy had lost 208,000 in August. (The numbers in the chart are 12-month averages, so they don’t match these examples.)

Another example: In October 2003, when job growth was finally starting again after a long slump, the initial estimate was a gain of 126,000 jobs. The final estimate was 203,000.

And late last year, as the Great Recession appears to have been in its final stages, the government initially said the economy lost 11,000 jobs in November. Its most recent estimate — still not final — is that the economy gained 64,000 jobs.

As a rule of thumb, the government has understated job growth by roughly 50,000 to 100,000 jobs a month during the first year after a recession’s end. The main reason is the difficulty estimating job changes at new businesses and failing ones. Floyd Norris has written about this issue.

None of this guarantees the government is making the same mistake again. And even if it is, the economy remains a very long way from being healthy. But it’s worth keeping in mind.

If you’ve already lost your job, your prospects for finding a new one are looking dismal. Especially if you lost your job a long time ago.

Private-sector job growth has slowed. The workweek also shrunk in June, and wages fell.

The labor market is recovering and will continue to do so, but slowly, an economist writes.

Maybe what Wall Street’s risk-seeking bankers really need is a better diet.

New York City’s residents have lower mortality rates than the nation’s, especially among the older population, though we’re not sure why, an economist writes.

Generally speaking, childlessness is rising: More women are opting to forgo motherhood than their predecessors a generation ago. Except for the most educated women, a new report finds.

Perhaps Americans can be nudged into buying health insurance rather than being required to do so, an economist writes.

President Obama needs to appoint a strong but delicate voice as director of the Office of Management and Budget, and Paul Krugman would be an excellent choice, one economist writes.

Inflation would cost the country less that it usually does and might be just the thing to sort out the housing crisis, an economist writes.

What effect will grade inflation at the country’s law schools have on law graduates’ career prospects?

Catherine Rampell is the economics editor at nytimes.com.

David Leonhardt writes the Economic Scene column, which appears in The Times on Wednesdays.

Sewell Chan writes about economic issues from Washington D.C.

Jack Ewing writes about European economics and business from Frankfurt.

Marc Lacey is The Times's bureau chief for Mexico, Central America and the Caribbean.

Economists offer readers insights about the dismal science.

Economics doesn’t have to be complicated. It is the study of our lives "” our jobs, our homes, our families and the little decisions we face every day. Here at Economix, David Leonhardt, Catherine Rampell and other contributors will analyze the news and use economics as a framework for thinking about the world. We welcome feedback, at economix@nytimes.com.

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An accounting of the government’s rescue package.

Three economists explain what worked and what didn't.

A map of unemployment rates across the United States, now through January.

Faces, numbers and stories from behind the downturn.

A series about the surge in consumer debt and the lenders who made it possible.

A series exploring the origins of the financial crisis, from Washington to Wall Street.

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