{"id":964,"date":"2011-02-06T07:19:17","date_gmt":"2011-02-06T12:19:17","guid":{"rendered":"http:\/\/www.multiplier-effect.org\/?p=964"},"modified":"2011-02-06T14:07:21","modified_gmt":"2011-02-06T19:07:21","slug":"seasonal-adjustments-roughly-account-for-reported-drop-in-unemployment-rate","status":"publish","type":"post","link":"https:\/\/blogs.bard.edu\/multiplier-effect\/seasonal-adjustments-roughly-account-for-reported-drop-in-unemployment-rate\/","title":{"rendered":"Seasonal Adjustments Roughly Account for Reported Drop in Unemployment Rate"},"content":{"rendered":"

In Friday’s post<\/a>, I pointed out that unemployment and employment numbers announced by the BLS had apparently been changed greatly by the process of adjusting for\u00a0typical seasonal changes. These adjustments are meant to account, for example, for the fact that retail business is generally stronger than usual\u00a0during the holiday season at the end of each year.\u00a0Friday’s widely reported unemployment drop\u00a0to 9.0 percent in January\u00a0from 9.4 percent the previous month was a figure that had been seasonally adjusted by the BLS to remove such normal seasonal effects. Also reported by the BLS Friday in the same set of documents were non-seasonally adjusted numbers that showed an increase in unemployment from 9.1 percent in December 2010 to 9.8 percent in January 2011. Few internet news outlets seem to have reported these latter percentages or the underlying raw numbers used to calculate them. On the other hand, many blogs and other news sources mentioned that adjustments\u00a0had been\u00a0made to the official numbers to reflect improved estimates of population growth from recent surveys, resulting in a problem with comparing January’s numbers with December’s. Friday morning’s blog post contained a qualifying statement to the effect that these population-related statistical adjustments had probably affected the un-seasonally adjusted numbers that I reported in the same post. Here is what I have been able to figure out about the importance of these\u00a0two factors in\u00a0creating such a large difference between the seasonally adjusted and non-seasonally adjusted one-month\u00a0changes in the unemployment rates reported by the BLS.<\/p>\n

The\u00a0seasonally adjusted drop in number of unemployed people was -622,000, according to the BLS figures reported Friday.\u00a0Table C\u00a0in the accompanying news release<\/a> estimated that annual changes in population estimates made by the BLS\u00a0each January had this\u00a0year magnified the reduction in unemployment from December to January by +32,000 individuals, leaving a true\u00a0drop of perhaps \u2212590,000, once one removed the effect of the\u00a0population\u00a0adjustments. On the other hand, non-seasonally adjusted figures from the same\u00a0economic news release\u00a0(Table A-1<\/a>) showed an increase in the number of unemployed people of +40,000. Hence, one can deduce that, at least to a rough approximation, seasonal adjustment resulted in a much larger swing\u00a0than population-related adjustments in\u00a0figures\u00a0reported in the headlines yesterday. Namely, about 630,000\u00a0more people were\u00a0unemployed last month,\u00a0once one\u00a0puts back in\u00a0the effects of\u00a0typical seasonal changes in unemployment, as estimated by the BLS, resulting in a swing in the estimated figures\u00a0of approximately +.4 percent of the\u00a0labor force. In other words, the reported reduction\u00a0in the\u00a0unemployment rate from 9.4 percent to 9.0 percent in January derived from\u00a0household survey data\u00a0can be accounted for almost entirely by seasonal adjustments\u00a0applied by the\u00a0BLS.<\/p>\n

Minor corrections for readability\u00a0made to\u00a0the post above approximately 2:00 pm, February 6 by G. Hannsgen<\/p>\n","protected":false},"excerpt":{"rendered":"

In Friday’s post, I pointed out that unemployment and employment numbers announced by the BLS had apparently been changed greatly by the process of adjusting for\u00a0typical seasonal changes. These adjustments are meant to account, for example, for the fact that retail business is generally stronger than usual\u00a0during the holiday season at the end of each […]<\/p>\n","protected":false},"author":193,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[109,11],"class_list":["post-964","post","type-post","status-publish","format-standard","hentry","category-employment","tag-seasonal-adjustment","tag-unemployment"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/964","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/users\/193"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/comments?post=964"}],"version-history":[{"count":15,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/964\/revisions"}],"predecessor-version":[{"id":976,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/posts\/964\/revisions\/976"}],"wp:attachment":[{"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/media?parent=964"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/categories?post=964"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.bard.edu\/multiplier-effect\/wp-json\/wp\/v2\/tags?post=964"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}