In the ten months between January and November 2002, the U.S. unemployment rate fell by seven-tenths of one percent: if you were looking for a job, your odds of finding one were markedly, markedly better in November than they were in January.
But if you weren't looking for a job but were instead watching your TV or reading your newspaper, you would have been told that the unemployment rate was higher in November than in January. You see, the Labor Department headlines "seasonally adjusted" numbers, and because we expect unemployment to fall from January to November--as factories, shipping companies, and stores get ready for the Christmas rush--the Labor Department "adjusts" the unemployment rate. So when the Labor Department says unemployment rose from January to November, it is actually saying that unemployment fell by less than it would according to the typical seasonal pattern.
In fact we undergo a full business cycle--a more than one percentage point rise and fall in the unemployment rate--every year, simply through the seasonal cycle. Yet who among us (at least, among those of us who keep our jobs and don't have to look for new ones) notices? The way the press reports the numbers make this seasonal cycle largely invisible--except to those of us who directly feel its impact.
I'm Brad DeLong
Posted by DeLong at December 30, 2002 01:59 PM