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The Spectacle Blog
As Aaron Goldstein and I have each noted, today’s jobs report must be a short-term boost to President Obama. Over at intrade.com, Obama’s betting odds to win re-election in 2012 are up from 55.5 percent yesterday (and 54.5 percent the day before) to 56.8 percent, having traded above 57 percent this morning.
But it’s economics I want to talk about for a minute, rather than politics.
It is all the rage among conservatives, libertarians, and others who, like me, fear and loathe the Obama administration to point out the labor participation rate and suggest that the numbers are being manipulated to the advantage of Barack Obama and that labor statistics are barely-concealed “propaganda.”
One of the leaders of this wave — and a guy who I think is generally quite a good analyst — is Tyler Durden who writes over at ZeroHedge.com. A perfect example is here.
I have some sympathy to this argument, but I think it’s getting much more traction than it deserves, as you can see in the comments to Aaron’s note and my note about the employment numbers.
But even someone who digs into the numbers as much and as well as Durden does can sometimes miss something important.
In particular, Durden says that the civilian non-institutional population rose by 1.7 million month-over-month but doesn’t mention that almost all of that increase was due to an adjustment by Bureau of Labor Statistics based on the results of the 2010 census, plus smaller annual adjustments.
From the BLS report:
The adjustment increased the estimated size of the civilian noninstitutional population in December by 1,510,000, the civilian labor force by 258,000, employment by 216,000, unemployment by 42,000, and persons not in the labor force by 1,252,000. Although the total unemployment rate was unaffected, the labor force participation rate and the employment-population ratio were each reduced by 0.3 percentage point. This was because the population increase was primarily among persons 55 and older and, to a lesser degree, persons 16 to 24 years of age. Both these age groups have lower levels of labor force participation than the general population.
In other words, the participation rate (employment-population ratio) was reported to have dropped by 0.3%, exactly the amount of participation rate “drop” created by changing the population number used in the calculation (due to updated census data.) Without this once-a-decade adjustment, the change in participation rate would have been reported as…wait for it…zero.
I don’t want to overstate the significance of Durden’s oversight, which conservative voices around the media and the web are also making, namely the idea that the participation rate dropped 0.3 percent and the labor force dropped more than 1.2 million in the past month. Those things are simply not true no matter how loudly people scream “conspiracy” and “propaganda.” (Having been trading financial markets for about 25 years, I’ve heard these same accusations about economic data being manipulated to help the incumbent president — whether Democrat or Republican — so many times, they just bore me now.)
And while the actual participation rate might in fact be this new lower number, that would also mean that prior numbers were lower. In other words, the top-line change — caused almost entirely by using new census population numbers — is an artifact of the new census data, but few people have read to the end of the BLS report to get that important piece of information.
Furthermore, there are cyclical reasons that the participation rate shouldn’t be as high now as it was a few years ago in a different part of the economic cycle, as economist Brian Wesbury (no liberal, he) explains.
Look, I don’t like writing anything that is likely to benefit Barack Obama or his supporters. But the facts are the facts, and the claims of a big one-month drop in labor force and participation rate are simply wrong. If our side is going to call certain data “propaganda,” the least we can do is make sure we understand the data.
View all comments (40) | Leave a comment
More Blog Posts by Ross Kaminsky
http://spectator.org/blog/2012/02/03/participation-rate-issue-less
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J.P. Travis | 2.3.12 @ 3:07PM
"Without this once-a-decade adjustment, the change in participation rate would have been reported as...wait for it...zero."
You're not very good with numbers. Regardless of any adjustment from the Census, the population of the U.S. grows 225,000 each month. That number comes from the U.S. Census Bureau, so you can't ignore it. People age and retire at fairly consistent rates, so a 225,000 population growth translates into a 225,000 increase in the labor force, which puts the lie to the notion that a payroll jump of 243,000 could have any noticeable effect on the unemployment rate. We actually need to add about 400,000 jobs per month to make a dent in the unemployment rate. You're falling for the propaganda hook, line, and sinker.
aware| 2.3.12 @ 5:24PM
Yes.
Invictus | 2.4.12 @ 4:00PM
Uh...you do know that the NFP number and the unemployment rate come from two completely different surveys, right? Just sayin' that Rush has no idea what he's talking about.
Bill Hussein O'Stalin| 2.3.12 @ 3:21PM
Since Obama has taken over his agencies have a history of upping the numbers which get the big headlines, then revising them later, which is ignored by all but the die hards.
And this isn't the first time "potential workers" have disappeared off the radar under Obama. Here's a well researched article which indicates how it works. The same scheme has been used by the Obama White House in reference to GDP which has been revised downward several times. The big number gets the headlines, the revised number is ignored.
Read more at NetRightDaily.com: http://netrightdaily.com/2012/.....z1lLt9qYic
Once again, the civilian labor force participation rate has declined, from 64 percent to 63.7 percent in a single month. Since January 2009, it has declined from 65.7 percent, resulting in approximately 4.7 million people no longer being counted towards the unemployment rate. If they were included, the real rate of unemployed working age adults would be 11.01 percent, and the underemployed would be 17.6 percent.
Overall, that includes the 12.7 million people that BLS says are actually unemployed, and then 4.7 million who have given up looking for work, plus another 10.5 million who can’t find full-time work. All together, there’s 28 million working age adults who simply cannot find work in the Obama economy.
It is hard to separate the continued obfuscation of this harsh reality by the government from the fact that we are now in an election year.
George S| 2.3.12 @ 3:37PM
Someone has to explain it to me as if I am a 5 year-old...
If I had a landscaping business in 2008 with 20 employees and I went out of business in 2010 because all my customers cancelled their business with me then:
How do my 20 employees count in the unemployment figures? According to this labor participation rate adjustment, the unemployment rate is unaffected because once my company disappears, then it's as if those jobs never existed. So those 20 are new job seekers who join a population pool of job seekers that has decreased overall because of... their age?!?
If 10 of them find a job at McDonald's (let's say a new McDonald's opened in the area) then that would bring down the unemployment number because those are "new jobs" spread out over a lower participation rate. But 10 of the other guys are still looking. Net loss is still 10 jobs but by your figuring, there has been a REDUCTION in the adjusted figures.
Seems as if the BLS has taken a page out of 1936 Soviet bureaucracies air-brushing people out of existence.
Oldefarte| 2.3.12 @ 3:54PM
Ross, great article on Corzine in the mag this month. No doubt the inching down of the unemployment rate is good news, but IT AIN'T NOTHING TO WRITE HOME ABOUT. The bottom line is that the economy of this country stinks, and we should have come out of the recession long ago. And why have we not? Simple, IT'S THE DEMOCRATS, STUPIDS!!!!
Mike| 2.3.12 @ 3:59PM
"Without this once-a-decade adjustment, the change in participation rate would have been reported as...wait for it...zero."
And without that same adjustment, the NFP would have been 174,000 lower.
You are also ignoring the fact that even though it's a census adjustment, it still dramatically dropped the overall labor force participation ratio. 1.25 million not in the labor force out of 1.5 million total?? That's 83%, or only 17% in the labor force! 17% is dismal compared to the historic labor force participation ratio of around 65%
Bill Hussein O'Stalin| 2.3.12 @ 4:34PM
Here's an article from Gallup who is considered more accurate than the BLS. Gallup's figures put unemployment at 8.6%. Now how's that Obama number so good again?
http://www.gallup.com/poll/152.....nuary.aspx
Bill Hussein O'Stalin| 2.3.12 @ 4:35PM
Here's an article from Gallup who is considered more accurate than the BLS. Gallup's figures put unemployment at 8.6%. Now how's that Obama number so good again?
http://www.gallup.com/poll/152.....nuary.aspx
C Bowen | 2.3.12 @ 4:46PM
Ross;
Just FYI, "Tyler Durden" is a nom de plume (from the movie Fight Club) and is thought to be more then one person on zerohedge.
aware| 2.3.12 @ 5:28PM
Dude, now you just trying to provide cover to the corrupt bastards shoveling bogus numbers to manipulate the poor sheep critters. Step back for a moment. Data going in bogus gives bogus results.
Ross Kaminsky | 2.3.12 @ 6:18PM
My last comment on this topic: As I said, the problem with the "we lost 1.2 million from the work force this month" claim is the "this month" part.
Those who dislike Obama are so desperate to find the dark cloud that they are unable to admit an at least relatively good number.
This isn't about my falling for propaganda or my providing cover. I have seen all of this before and it's just not the conspiracy that some people claim.
And I say that as someone who loathes Barack Obama every bit as much as any of you.
You guys sound like Democrats when you accuse me of some ridiculous ulterior motive when I simply try to explain numbers that few others have even mentioned.
Mike: BLS explains the issue you note about what a large % of the newly counted population is not in the labor force.
Finally, I am the first to say, and have said on these pages (See my Nov 2, 2011 article entitled "Bad economists and good capitalists" that anything good happening in the economy is in spite of, not because of, Obama.
I want Obama gone as much as any of you. This does not mean that I should just let people misrepresent data without question.
If you don't like learning something or discussing something, that's on you, as they say.
Mike| 2.3.12 @ 6:59PM
And it still dramatically lowered the labor force participation ratio. No matter which way you look at it, this NFP was much, much weaker than presented.
Mike| 2.3.12 @ 7:00PM
The bit about the population growth being in those between 55 and over and between 16-24 seems totally disingenuous also. Sounds more like a B.S. excuse.
Mike| 2.3.12 @ 7:06PM
Even their excuse doesn't compute. The average LFP for 16-24 is around 60% and for 55+ it's 30+. So how do they get 13% out of that?
http://www.angrybearblog.com/2.....force.html
Mike| 2.3.12 @ 7:17PM
And according to this spreadsheet from the BLS, they see LFP for 16-24 at around 55% and 55+ at 41%. So there is no way their pathetic excuse about the population demographics explaining a 13% LFP of their new data (that you dismiss as being important) pans out.
ftp://ftp.bls.gov/pub/special......pr1020.xls
Mike| 2.3.12 @ 8:15PM
It's pretty clear to me that, as usual, the BLS massively manipulated the statistics in order to create an artificially inflated NFP. Just like they do with the seasonal adjustments and the Birth-Death model.
Mike| 2.6.12 @ 3:46PM
Funny how I point out facts and I get no response.
Mike| 2.6.12 @ 3:46PM
Funny how I point out facts and I get no response.
Ross Kaminsky | 2.3.12 @ 6:34PM
Check this:
http://www.ftportfolios.com/bl.....th-deniers
aware| 2.4.12 @ 11:07AM
You actually believe Brian Westbury? I'm remembering his hopelessly optimistic article in Human Events in Feb. of '08 when he said "the market basically today is priced for almost the end of the world." He thought you should be buying stocks then and claimed there was no recession. What an idiot! Dow at 13,000 when he said this. Next stop 6000 1 year later.
Dude, I mean REALLY?
aware| 2.4.12 @ 11:10AM
Read this and know a fool :http://www.humanevents.com/article.php?id=25189&keywords=brian+wesbury+\'08
Stan Redmond| 2.3.12 @ 9:32PM
I absolutely HATE saying this but sadly I think Obama is 100% for re-election. Come on... Romney? He's the republican John Kerry.
The entire media world is 100% going to help Obama and 100% destroy Romney (the default loser rpublican candidate)
I have rearely, if ever, been so depressed about the future of this country.
9thID| 2.3.12 @ 10:15PM
Ross also supports baseline budgeting. It's all in how you BS the numbers around...
JP| 2.4.12 @ 11:17AM
Ross,
We shall see in future months what the aggregate labor figures are. Ultimately, it is the net number of people in gainful employment that matter. I've followed the BLS statistics loosely these past several months. Ditto for the CPI. Their work is similiar to the work of those in climate science and dendroclimatolog - very abstract.
In December something similar occured. The unemployment rate went down significantly (0.4%) without any appreciable increase in employment. The BLS reduced the total number of people in the labor force to get to thier result. Perhaps that is why many conservatives figure the fix is in. Stay tuned.
numbercruncher| 2.4.12 @ 12:12PM
While I agree with the article's impliation that the adjustment is not some kind of conspiracy. If you look at the data from year to year, (including in the months leading up to this report - which has a large correcting factor from the census), the number of individuals leaving the labor force has been staggering, and thus, been a major factor with the reduction of the labor force. The one number I have focused on is the Employment population-ratio (Basically employed over civilian population not in an institution (e.g. over 16; not in school), the ratio is currently at 58.5%, up .3% over its low point earlier this year and 0.1% over where it was in Jan of 2011. To return to "normalcy" (e.g. where we were in say Jan of 2008 before the bubble completely burst)we were at around 63%. If you factor the average job growth for the last three months (from the establishment survey) of 200k per month it would take us over 50 years at that pace to return to that level (by the way in the 90's that level hit around 66%). Are we improving yes, could this be a sign we will improve more, yes. But we are hardly out of the woods, and with this President's lust for taxing the private sector and redistrubuting, let me assure you its pretty easy to get off track!
Dennis Sevakis | 2.4.12 @ 12:59PM
If you have complete faith in the BLS "Seasonal Adjustment" then Mr. Kaminsky's criticism is somewhat palatable. On the other hand, the Bureau's "adjustments" to the January figures after the census corrections have a greater effect on the results than the census adjustements alone as can be seen in the Jan. "unadjusted" numbers. If you're interested, a spreadsheet with these goodies and much, much more is available at
Oldefarte| 2.4.12 @ 2:04PM
Great ideas/discussion [most] all, and you folks amaze me concerning your statistical analysis acumen [I struggled with the big S in college no doubt]. However, I'm of those Doubting Thomases concerning this administration, not from again my intricate knowledge of the statistical numbers and their representation, but alternatively from my opinion regarding the overall personae of this admninistration's corruption. When one considers what they have done using the current Fed chairman as a puppet to juice the economy [due to their fiscal failures], using federal departments to sue state governments over immigration and to prevent domestic oil drilling, Justice's ignorance of non-partisaned discrimmination issues due to racial preferences, their current attack upon religions, etc; then a manipulation of statistical employment numbers for pro-election purposes is not out of the relm of thought as far as I'm concerned [apparently I'm not alone considering some of your comments above]. My whole professional business lifetime was spent in the accounting area, and I'm well aware of the ease with which OFFICIAL numbers can and are manipulated, so yeah I'm skeptical of these unemployment number decreases!!!!!!!!
Oldefarte| 2.4.12 @ 4:13PM
PS: Now here are some figures/statistics that I'd like to share with all of you:
'..."CBO reports that annual spending over the Obama era has climbed to a projected $3.6 trillion this fiscal year from $2.98 trillion in fiscal 2008, or more than 20%. The government spending burden has averaged 24% of GDP, up from an average of about 20%. This doesn't include the $2 trillion tab for ObamaCare.
"All of this has increased the federal debt by about $5 trillion in a mere four years. Thanks to higher revenues, the federal deficit will decline to $1.08 trillion in 2012, or 7% of GDP. But that is still the highest deficit since 1946 - except for the previous three years. In other words, the four years of the Obama's Presidency will mark the four highest years in spending and deficits as a share of the economy since Harry Truman sat in the Oval Office. ... "To sum it all up, CBO's facts plainly show that Mr. Obama has the worst fiscal record of any President in modern times. No one else is even close."....'
Peter Jackson| 2.4.12 @ 7:55PM
http://www.zerohedge.com/news/.....yroll-beat
Since there still is confusion regarding yesterday's whopping "surge" in non-farm payrolls, which represented a 243K jump in the Establishment survey (of which 490K was temp jobs, same as in the Household Survey where temp jobs soared by a record 699K), yet only to arrive at an employment number last seen ten years ago, when the US population was about 30 million lower (think about that: 30 million increase in population and no change in the total employed), here is the final explanation of what happened yesterday.
As everyone knows by now, January is when the BLS imposes its annual seasonal adjustment revision (more on that in a second) for the previous January-December period. What this manifests itself most directly in, is the divergence between the Nonadjusted January number of the establishment survey of any given year and the Unadjusted number. And while the January adjustment is always substantial, it is the fact that the so-called beat was entirely based on assumptions that makes yesterday's NFP number so meaningless, and hardly the basis to assume that the US economy has taken off.
The chart below shows the adjusted and unadjusted employment survey data for total Nonfarm Employees. The annual January overadjustment is more than evident. Just as evident are the subsequent under-adjustments as seasonal data is lowered to account for volatility in the NSA data. What is very notable is that in January, absent BLS smoothing calculation, which are nowhere in the labor force, but solely in the mind of a few BLS employees, the real economy lost 2,689,000 jobs, while net of the adjustment, it actually gained 243,000 jobs: a delta of 2,932,000 jobs based solely on statistical assumptions in an excel spreadsheet!
So how does this data fit in specifically in the context of the just passed NFP whopper of a number? Simple. The chart below shows the January seasonal adjustment for the past 4 years, since 2009. The number of jobs added for "seasonal" purposes to the NFP number were as follows: 2009 - 2,006,000; 2010 - 1,970,000; 2011 - 2,129,000, and the all important 2012: 2,146,000. Once again, this is the number added to the NFP unrevised baseline to get a "final" number which is then blasted to the media. The chart below shows the historical January adjustment, to the NFP data, as well as the 2012 reported adjustment, and also what the statistical adjustment would be for the NFP number to have the NFP number come in line with expectations of a 140,000 beat.
Here is the kicker: the market mood yesterday would have been far more somber if instead of a seasonal fudge-factored statistical addition of 2,146,000 jobs, the BLS had decided on a number that is merely the simple average of the statistical adjustment of the past 3 years, which comes down to 2,035,000. In fact, had the BLS used this seasonal adjustment, the final NFP headline number (SA) would have been +132,000, or a miss of expectations of 8,000 (the Seasonal Adjustment number to get to consensus January expectations would have to be +2,043,000 to the NFP number). In other words, the difference between a + and - 2% move in the stock market is based on less than a 5% variation to the entire January seasonal adjustment, as had the BLS add just the simple average, the BLS report would have been a disappointing miss, and the market would have likely dropped (although with 5 momos in charge of the entire market, the thesis would have likely promptly shifted to "more QE coming" so who really knows). And now you know how the BLS' seasonal adjustment, which as Charles Biderman pointed out yesterday is guarded as secretly as Coke's recipe, defined the tone and the mood of the market for at least one month.
Finally, as to some newsletter and namesdropping blogs allegation that the Labor Force did not, in fact, increase by 1.2 million in January, we have one simple question: just how does one "refute" a statement with an assumption? Because last we checked, the BLS did not provide a smoothing breakdown of how it applied its seasonal adjustment for the "population control effects" which saw the population increase by 1.7 million in January and those not in the labor force rose by 1.2 million. Quite the contrary , what the BLS did provide is Table C: "December 2011-January 2012 changes in selected labor force measures, with adjustments for population control effects" which does show how on an apples to apples basis the adjustment factors did in fact impact the two key components in determining the unemployment rate: the amount of Americans employed, and those not in the labor force.
And while one can try to say it is inconceivable to say that the US population jumped by 1.7 million in one month, we reply that this is coming from the BLS whose admission of the "population control effect" adjustment merely confirms that it has been misrepresenting the actual labor force participation rate for at least a year. In other words, while one may pander to semantics, and believe that a data series is not a data series because of one's mastery of sophistry and assumptions, this is totally irrelevant: the end result is that in January, those "not in the labor force" did in fact rise by 1.2 million (whether compared to December or to 2011 - please, go ahead and check as many times as needed), and the labor force participation rate dropped to a new 30 year low of 63.7%, a number which incidentally only has to drop by 5% more percent for the BLS to report zero, or even a negative, unemployment rate.
albert constantine jr.| 2.5.12 @ 9:58AM
I haven’t really seen it mentioned here or anywhere else, so please allow me to mention an important tangent. If the population is growing and the size of the workforce is shrinking, aren’t more people being supported by less.
This seems to be particularly compelling as the majority of Baby Boomers enter the 55 and older cohort, and have to make decisions about when they begin to start drawing out their Social Security benefits. Couple that with delays of those in the 16 to 24 year old cohort entering the labor force, and the latest job numbers should generate much more concern.
JP| 2.5.12 @ 10:03AM
Here's some highlights of the Jan BLS Report:
1)The unemployment rate declined by 0.2 percentage point in January to 8.3 percent; the rate has fallenby 0.8 point since August.
2)Among the major worker groups, the unemployment rates for adult men (7.7 percent) and blacks (13.6percent) declined in January. The unemployment rates for adult women(7.7percent), teenagers (23.2percent), whites (7.4 percent), and Hispanics (10.5 percent) were little changed. The jobless rate forAsians was 6.7 percent, not seasonally adjusted.
3)After accounting for the annual adjustments to the population controls, the employment-population ratio (58.5 percent) rose in January, while the civilian labor force participation rate held at 63.7 percent.
The numbrer of engineers grew by 7000, mining 10,000, construction 21,000 , and manufacturing 50,000. As I stated in earlier posts, all of this growth has occured during a period of historic federal defecits ($1 trillion + annually and 0% interest rates that have held for 3 years). All of this artificially induced stimulus has only produced weak positive GDP growth. If conditions accelerate in coming months (ie 300,000-400,000 new jobs per month) one wonders if the Fed will move to increase interests rates. Of course, we must take into account the election. Which means the Fed will probably do nothing, but watch on the sidelines.
No one is talking about hyperinflation - well not yet. If a real recovery does take place the President will win handily (and the Dems will recapture the House). But, that is alot of "Ifs".
Anthony Sanders | 2.5.12 @ 1:37PM
But the fact remains that Santelli was correct. Look at The Fed's own charts at the link below. Plus, employment to population ratio remained at 58.5% (Carter Malaise levels) and labor force participation continues to fall. There is something weird with the adjustment.
http://confoundedinterest.word.....rag-about/
Beppo| 2.5.12 @ 4:22PM
Ross...I don't know what is more painful the fact you have explain this in the first place because some spinmeister at conservative central came up with this or the desperate attempts by some to prove you wrong. When Obama is up against folks like this why does he need to worry. He certainly no shoo in but as of right now he's going to hard to beat. These numbers with the revisions are recovery numbers particularly when you throw in the manufacturing, service and auto stats. Americans don't buy over 14 million autos when the economy is heading south. The other factor is Romney who is already holed below the water line and Obama hasn't yet run out his guns. If the economy continues on an upward trajectory and clearly the street thinks it will (and in total honestly so do I) then intrade is not off the mark however much we want to deny it.
JeffC| 2.5.12 @ 4:25PM
to quote you "and the labor force dropped more than 1.2 million in the past month. Those things are simply not true" ...
actually it did drop 1.2 million so who is telling fibs ?
Ross Kaminsky | 2.6.12 @ 9:56AM
Wesbury explains it here as well:
http://www.ftportfolios.com/bl.....th-deniers
Peter| 2.6.12 @ 6:37PM
Wait...did he just apply a once a decade adjustment to a monthly decline and got a net zero result?
Someone needs to go back to school and get some math and economics classes.
In December 2007, participation was 66%. It's now 63.7%. We can adjust it 0.3% and still have 2.0% drop as opposed to 2.3% drop....
navtechie| 2.6.12 @ 8:54PM
Nope.
http://market-ticker.org/akcs-www?post=201495
Jeremiah| 2.6.12 @ 10:42PM
http://soberlook.com/2012/02/e.....shows.html
http://market-ticker.org/akcs-www?post=201495
So one can try to explain away the exit from the workforce figures with simple ratio adjustment but then we have a problem if we do -- the participation rate dropped in a big way, from 58.5% to 57.8%. That's two tenths off the low from last year (January 2011) and more-importantly, basically a flat-line since the recession's depths. There has been no material improvement in this metric since the end of 2009 when it hit the floor. Yes, it's rattled around, but it's not getting better, and it is this number that matters to fiscal sustainability, as only employed people pay taxes.
As I noted the employed number went down from 140.681 million to 139.994, a drop of 737,000 on the month. This, into an adjusted (higher) population. Yes, I know, this figure is non-seasonally adjusted and people are usually (always, for all intents and purposes) fired in January. Nonetheless it is what it is, and it, along with the population change, was responsible for the drop in the participation rate.
Note that irrespective of when the population change was recorded (all at once or across the last year) the end point for the participation rate remains the same; in fact the inclusion of the population adjustment this month means we've been overstating the participation rate for the last year. Six of one, a half-dozen of the other; the end point is the same.
Finally, if you look at the not-in-labor-force as a percentage of the total population, you discern the problem for the broader public, as that tells you who can work but isn't even bothering to try to find a job. It's on a tear, showing that indeed, people are exiting the workforce, and the claim of those who say this did not happen last month are factually wrong.
Again, if the population adjustment was "late" then this means we've been understating this value for the last year (lower is better from the standpoint of the workforce), so it's been worse than reported. But the important aspect of this chart is the slope, not the absolute value.
The Obama Timeline | 2.7.12 @ 4:48PM
The problem with this defense of the statistics is that it only reinforces what the numbers are: estimates. That is, no one knows for certain the exact unemployment rate because most of the figures used in the calculations are estimates.