Bad US payrolls data for May appear to reflect a “general weakening in job growth” rather than any temporary distortion, the head of the agency that compiles the statistics said in an interview with the Financial Times.
“Probably the most notable thing about [the jobs report] is there isn’t anything notable about it,” said Keith Hall, commissioner of the Bureau of Labor Statistics.
The US added only 54,000 jobs in May, well below this year’s average gain of 182,000, stoking fears that the recovery of the world’s largest economy has lost momentum .
Some analysts suggest that the slowdown might reflect supply chain disruptions after Japan’s tsunami or extreme weather events such as the tornadoes that hit the US in May, rather than any deeper slowdown.
But Mr Hall said this is hard to see in the data. “There was really no jump at all in people reporting work disruption. So whatever has happened this month is probably not a weather effect,” he said.
He said supply chain disruptions would be most likely to cause a fall in hours worked rather than outright job losses.
The slowdown in job growth was spread across many industries, rather than concentrated in manufacturing.
“The good news, of course, is it is just one month. This is a deceleration but it doesn’t mean we are starting a new trend,” said Mr Hall.
Analysts often complain that weather effects or data revisions distort the BLS jobs data but Mr Hall said the difficulties are fundamental. “The difficulty is not so much with our solutions – it’s with the problems,” he said.
Mr Hall acknowledged that the BLS had struggled to adjust the jobs data for a wave of company failures at the start of the recession. He said the agency has now started to update its model as soon as new data comes in from states on company births and deaths.
“When we go into recessions, now we are pretty convinced that we will do much better with our model,” he said.
Mr Hall said BLS was interested in innovations such as electronic data collection and real-time economic indicators. For example, researchers are using price data from shopping websites to compile daily inflation measures.
“The issue with that right now is it is really new and it has not been proved successful,” said Mr Hall. He said that, so far, the BLS has concentrated on cutting costs by moving to surveys over the internet, thereby freeing resources to tackle a long-term decline in the rate of response to surveys.
An area the BLS wants to improve is the survey of where households spend money that it uses to balance the inflation data.
“Right now, we go and sit in someone’s living room and bother them about what they have bought in the last month,” said Mr Hall.
“I think we have got a lot of potential there for looking at scanner data and using some technology.”
White House defends strategy
The White House denied the US was facing a “jobless recovery” even as it continued to struggle to identify ways to spur the private sector into action, writes Stephanie Kirchgaessner.
Austan Goolsbee, who chairs the White House council of economic advisers, on Sunday suggested the administration was relying on existing initiatives – from a plan to reduce burdensome regulations that some say have not gone far enough, to the creation of an “infrastructure bank” that has no support among Republicans on Capitol Hill – to drive growth.
Mr Goolsbee also warned in a series of appearances on Sunday morning talk shows it was too early to conclude that job figures released on Friday, which fell far below estimates, spelt doom for continued growth. In a sign of how the disappointing figures have put the White House on the defensive, Mr Goolsbee also insisted that Mr Obama had “never stopped talking about jobs”.
“For him, the growth strategy is the number one issue,” he said on ABC’s This Week.