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Center for Economic and Policy Research Co-Director Dean Baker argues the September unemployment rate likely didn’t fall as much as reported.
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Well -- US unemployment rate is I'm sure you've heard fell to seven point 8% in September from eight point one.
Economists were expecting the rate to rise to eight point 2% but one economist Dean Baker center for economic and policy -- your research co director.
Says the unemployment rate dropped is quote.
Almost certainly a statistical fluke.
We don't have to quote him because we have him he is here right now.
Liberal economist Dean Baker so like it or not -- figure be described but.
Why do you think it's is that his -- for why do you think it's a statistical fluke what we saw -- Well let me just declare a lot people in the running around saying that someone doctored the -- -- not I'm not saying that it all understood numbers are.
These numbers are -- -- so we have two different surveys one is of establishments they ask go -- ask firms have very large survey over 400000 firms are in the survey.
That's a pretty accurate one.
On the other one is a household survey and you know usually those numbers are bought our.
But sometimes you see a big movement as we did it for this for the September data.
And you go well most likely at least part of that I'm not saying all of it you know I -- my best guess probably about tenth of percentage point that was a real drop.
But the three tenths of percentage point that really doesn't fit with the other data we've been seeing about the economy.
So -- sort of inclined to say probably be on -- point rate felt about 8%.
We may see some jump up back to 8% say when we get the data for October.
-- -- good news going the right direction but not it's faster than its -- OK just a fortified well okay those of the US on two unemployment rates go back to the other statistic though the compares.
The to the establishment survey in the household survey if you can put back those other figures.
Because what you will see is the the household survey's all over the place that's -- yellow line you can't make any sort of judgment about what's happening.
The Blue Line you see is much more steady and that's the one you have more trust in correct.
That's right and again justice say you know you can't say -- -- -- can't get anything from the household survey it's just again -- -- exaggerate -- big movement in the household survey odds are at least part of it is just measurement here now here's here's my big question we saw the the GDP figures estimated down from.
I guess was one point 7% which is bad enough down to one point 3%.
My question is how can unemployment drop at the same time as growth drops.
Well again -- -- another quarter now my guess is woman get the data for the third quarter -- probably see growth somewhat over 2% reduction and again did the revision was simply measuring what we've already seen it was originally reported when we first got the data is one point 3%.
-- revised up to war and it's -- one point five their -- up -- seven and advise the -- 13.
You know in reality those revisions are not that large you know we'll get subsequent revisions to it and it could be up or down who knows what will be you know and we looked back at this number two years from now.
It may well be very different -- what about a month from now and and again the key here is is the election we've got one more of these.
Jobs numbers coming out before the election right -- just a couple of days before the election might that revise these numbers upward.
Well the unemployment number is never revised we're not getting more data on the unemployment.
What number made changes the number of jobs and that's certainly can go in either direction we recently were told -- do benchmark revision every year.
That's to march served as a earlier in the year and that's gonna revise the numbers a number of jobs that are in the survey upward by about 350000.
-- as of march tooth our 2012.
Now the numbers were getting this month will be by the election.
But those will be revised when we get benchmark revision to -- march 2013.
So I don't need to make this confusing I'm just saying that we look -- -- small changes.
They can go either way I -- make too much of that if we really -- look at the economy I think you really have to look at the longer term picture.
And I've been you know same more or less the same thing that you know economy's growing it's doing okay -- that -- Except there weren't very deep hole and the rate of growth we've been seeing -- -- -- -- long time to get out of that -- though it's off thought that was I was going back to it.
Take eras when we had these big jumps in households.
Employment household figures one was back in 1983.
In the middle of 1983 we were growing.
At nine point 1% in that particular quarter on an annual basis.
-- you compare that come back from a deep recession from this comeback.
And its -- that.
Well it's -- -- understand it was a very very different type of recession DT 8182 recession was a -- one -- a classic recession was bought on but the Fed deliberately raising interest rates to slow the rate of inflation.
Went too far -- since the recession.
When you raise rates it means there's an easy solution that you lower rates.
And that spurs the areas that -- you'd you know led to sharp fall -- cars and housing.
You can't do that when you have a recessions brought on the by the collapse of the housing bubble which is a case here.
There's no easy way to get the economy back on track OK finally the Federal Reserve board of course it they have to mandates one is to maintain about -- dollar the others keep unemployment down have done to -- but either.
Of course it might be beyond their capacity to do that but.
Ben Bernanke thinks he can he can address those issues by QE3 will this.
Force him to pull back a little from QE3.
Well let's just declared inflationary it's been very low the last four years later on he says yes it in cellular that's always the target -- how it's hard to tell people you know who go to the guest pomp and see their -- double and two -- and less about the fact that the Fed's mandate is nothing to do with the depressing gasoline that happens that's determined international people -- I don't think.
I don't think Bernanke's -- is gonna back away I mean this is still moderate growth I can't seem backing away at all and you know if anything go if the continues here reports like this I think -- be pressuring him to do more really.
While a lot of people would think that it with a good jobs report maybe -- pull back a little bit but you think it might actually encourage him to do more.
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