Reuters (03/08/12) Jason Lange
Some economists are asserting the government is mismeasuring seasonal shifts in the labor market, and suggest the jobless rate’s sharp winter drop is partly an illusion. The unemployment rate has fallen six-tenths of a percentage point from October’s level of 8.9%, an unusually rapid decline that has puzzled analysts who question whether the economy was growing fast enough to bring unemployment down so quickly.
Several Wall Street economists have crunched the unemployment numbers and now believe the deep 2007-09 recession left a lasting impact, distorting the outcome of the government’s adjustments for normal winter lulls in employment. If their research is correct, the unemployment rate could change little in the coming months, potentially hurting President Obama’s chances for re-election.
Even the U.S. Federal Reserve has been surprised by the sharp declines in the jobless rate, and economists at the central bank are studying what lies behind the recent apparent improvements in the labor market. The government analysts who produce the data defend their methods for adjusting the numbers, noting that some real shifts in seasonal employment may have taken hold during the recession, meaning the winter of 2008-09 may not have been an anomaly.