On Friday, the government reported another decline in monthly (payroll) employment. This time the decline was 84,000. Weakness was greater than this number appeared to show, since prior months saw employment revised lower (ex: June went from -51,000 to -100,000, the first six-digit decrease since the recent declines began). Along with this the unemployment rate rose by a greater-than-expected amount, from 5.7% in July to 6.1% in August, its highest level in over four years.
As we haven't yet started with our topical coverage yet, I will refer you to an article dealing with this labor market report. Also, read the relevant chapter for this in the course text The Atlas of Economic Indicators. Finally, let me point out two things for you keep in mind as the semester progresses:
#1: When studying new data for an economic indicator, ALWAYS LOOK AT REVISIONS TO PRIOR PERIODS BEFORE EVALUATING THE CHANGE FOR THE CURRENT PERIOD (this puts the current change it into the correct context); and
#2: The overwhelming majority of media coverage from this report centered on the unemployment rate, which as I indicated on Thursday, IS A LAGGING INDICATOR.
I will leave it to you to figure out whether the media is actually basing its assessments of future economic activity on this lagging indicator.
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