WORKING IT OUT
Seasonal job adjustments matter
Dear John: Why are seasonal adjustments made to the monthly jobs numbers? Why is smoothing required? It makes no sense, nor does the birth/ death model. M.C.
Dear M.C.: Seasonal adjustments make perfect sense. Without them, for instance, the job market would look like it collapses in the summer because teachers are temporarily let go from their jobs. And it would look like it’s booming in September, when they go back to work.
Christmas would look like a hiring boom. January would look like a depression.
The trouble with the models is when there is unusual economic activity, as has happened in recent years. If one spring, for instance, doesn’t have the normal spurt of hiring because business conditions are abnormally bad, then the next five years’ worth of seasonal adjustments can be thrown off. Why? Because if the following year turns out to be more normal, the government’s computers will make it look even better because they were comparing it on a seasonally adjusted basis to the spring that was abnormally bad.
Seasonal adjustments look back five years, with each further-away year getting less significant in the calculations. So the abnormally bad spring still has an impact a halfdecade later.
Because of the unusual behavior of the economy during the socalled Great Recession, the seasonal adjustments have been off.
There is no reason for the Labor Department to use the birth/death model, which guesses at how many jobs are being created by newly “born” companies that the government assumes aren’t being reached in its surveys. Each of these new companies — if they are legitimate — will file paperwork with Social Security and the IRS. The new workers from these new companies should be counted that way and the guesswork will be removed from the process.
Note to Readers: A few weeks ago, the Dear John column came to the aid of a New York physician who had been hit by a limo. The driver left the scene of the accident.
This is a follow-up from F.G., as I identified the physician.
Dear John: I wanted to let you know that I did hear back from the insurance company of the driver that hit me and it has approved my claim and will be paying my medical all.
I’m sure this is in no small part due to your efforts. Thanks so much for the help. F.G.
Dear F.G.: Glad to help. bills after
Dear John: I have written to you before commending you on your exposés of various institutions and wondered why a man like you isn’t working for the government in one way or another.
Now that you have a personal relationship with Donald Trump, if and when he wins, you just may get that chance to influence the government and continue to “call it as you see it.” S.H.
Dear S.H.: So let me get this straight: You like me, yet you want to condemn me to working for the government! Thanks a lot.
And as far as my “personal relationship” with Trump, as I’ve said in other columns, I met Donald at the end of the 1980s when I worked at The New York Times, kept in touch professionally for a while and then lost touch.
In other words, we just know each other.
And the only paycheck I’ll ever get from the government is Social Security.