Unemployment as a Lagging Indicator

This column was published in Savannah Morning News.

Two weeks ago the U.S. Bureau of Labor Statistics reported that the nation’s unemployment rate for September fell from 8.1 to 7.8 percent, the lowest measure since January 2009. Unlike the decline experienced in August, this month’s report did not result from discouraged workers dropping out of the labor force. Total nonfarm payroll jobs increased by 114,000. Still, otherwise reputable and prominent figures are in disbelief of a legitimately recovering economy and labor market. Such a response, one part knee-jerk reaction two parts thoughtlessness, brings squarely into question one’s understanding of where the jobs numbers come from, how they are calculated, what they represent and what skews their connection with underlying economic progress...