WASHINGTON – Major new changes in the way the Labor Department counts jobs may help President Bush in his re-election bid. They may also help his Democratic opponents.
Starting with next week’s employment report for May, Labor will include in its civilian jobs data federal employees who work in Defense Department-owned establishments such as military base commissaries.
They previously were considered military workers and not counted in the national payroll survey for civilian non-farm employment.
Their inclusion is expected to give a slight boost to the closely watched payroll employment numbers – which is good news for Bush, who has been criticized by Democrats for a steady decline in jobs since he took office (though the data show the downtrend started a year earlier).
“Jobs” has become the political watchword going into the 2004 campaign. Bush earlier this month assured voters in Arkansas that he’s “first and foremost concerned about that person looking for a job.” He’s counting on more tax cuts generating new jobs growth.
Another change in jobs-counting methodology, however, may darken the employment picture and bring more bad news for the White House. In just the past three reported months, companies have shed 525,000 jobs.
Also taking effect with the May report, scheduled for release June 6, Labor statisticians will no longer base their estimate for employment growth generated by new business formations in the huge service sector (hotels to health care) on quarterly models, which have tended to produce identical numbers month after month, and even quarter after quarter. And the adjustment – used to capture changes in payrolls at companies too new to appear in the 300,000-business sample, picked every March – has always been positive. The loss of half a million jobs over the past three reported months, for example, would have looked even worse if not for the positive adjustments.
But the new model will produce monthly figures based on a five-year history of state unemployment insurance tax records for companies in all industries, Labor economists tell WorldNetDaily. As a result, their so-called “net business birth-death model” will show seasonal fluctuations – and big negative numbers in some months.
The old model, officially known as the jobs “bias adjustment,” had another name among private economists – the “fudge factor.” Some complained it was prone to political manipulation.
“Those numbers seemed to be pulled out of the air,” said Maria Forres, an economist with Griffin Kubik Stephens & Thompson Inc., a Chicago-based investment firm.
Labor Department economist Monica Traetow says the new model will “more accurately” capture jobs gained or lost from business start-ups or failures.
But she cautions that the figures will still be estimates based on historic data, and will not reflect actual activity in the reported months. The department cannot collect state records fast enough to report current figures, Traetow explains. There is about a 9-month lag in the availability of the full universe of unemployment insurance files.
Therefore, the new model can only assume a predictable continuation of historical patterns, and will likely miss turning points in the economy, Traetow confirms.
Labor has been working on the new model since 1995, gradually adding industries along the way. The addition to this month’s sample data of the large services division, which accounts for nearly a third of all employment, completes the conversion.
