So, is today's unemployment report good news or bad news? The answer is neither of the above; it is actually irrelevant. The reason for this are two words: "Seasonally adjusted". The numbers that come out this month and next, the numbers that the media will all jump upon, will get revised next month and again the month after. Historically, November and December have large, very large downward revisions.
(Keep in mind that the Household survey, which is what they use to calculate the unemployment rate does not get revised. So the 8.6% number is already final.)
Last year, the initial job numbers were downgraded by 483,000 jobs by the time they were finalized. The 2009 numbers were downgraded a whopping 1,299,000 jobs. In 2008 it was revised by 412,000 downwards, and in 2007 it went down 430,000. So, the numbers that came out today will very likely be downgraded by at least 300,000, more likely by 400,000 or more. Combine the two and we are talking about the numbers between now and the end of the year probably being wrong by a combined 850,000 jobs.
The media, of course, rarely go back and correct the record. Here is a chart of monthly revisions. Novembers are unrevised, last month has had its first revision, and September's numbers are final. Here is a graph showing the size and direction of the revisions over the last few years:
So, taking into account that the numbers will likely be completely changed over the next two months, the how do the numbers look? We now have as many jobs (Household survey) in the country as we had in June, 2009...and February, 2005. In other words, there are no more jobs in the country today than there were almost 6 years ago. The Employer survey looks worse. We have the same number of jobs today as in May, 2009...and October, 2004. Celebrate!
Here's the graph showing a slow but steady increase in employment on both the Household and the Employment series:
So, we'll have the real November and December numbers solidified on the first Friday of March. Until then, take these with a big lump of pink Himalayan salt.