the visible hand

it is the theory which decides what can be observed – einstein

First, we assume 103,000 jobs…

Posted by ecoshift on November 2, 2007

An economist, a chemist and a physicist wash up on an island after their boat sinks. Along side them is a crate of canned beans. Sadly, they lack the means to open it. The chemist claims he can find the right compounds among the wreckage to create an explosive substance to blow the cans open. The economist says that’s way too dangerous. The physicist suggests he climbs to the top of a palm tree and drop the cans on a rock at the perfect angle, breaking them open. The economist argues that’s way too complicated. The two scientists stare at him and demand his input. The economist looks proudly and says, “First, we assume a can opener.”

It’s an old joke, I know, but today’s job growth estimate makes it difficult to resist retelling…

Assuming 103,000 jobs were created in industries like construction (14k) and financial services (25k)– in the face of a housing market crisis and severe credit crunch– is a likely element for inclusion in the much needed National Integrity Index revisions.

Employment Report Shows 166,000 Gain in Jobs – New York Times
Published: November 2, 2007

Two distinctly different views of the economy emerged today in a single report: the crucial employment survey issued by the Labor Department.

The economy added 166,000 jobs in October, the fastest pace in five months, according to employers. Payrolls grew at a pace more than twice what analysts had predicted, led by a sharp increase in the service sector.

But a survey of consumers showed that fewer Americans were employed last month over all. The labor force shrank by 211,000 jobs, and 465,000 Americans said they were no longer working.

The mixed employment report underscores the uncertainty on Wall Street, as analysts insist the fourth quarter will include a broad slowdown in growth and spending even as some recent reports suggest a sunnier outlook….

Adding to the uncertainty about the report, most of the job gain — 103,000 of the 166,000 net new jobs — came from an estimate that the Labor Department makes each month about how many jobs were added by new businesses. The Labor Department did not actually find evidence of these jobs; it assumed they were created based on historical patterns.

In October, for instance, it assumed that new businesses in the construction sector added 14,000 jobs and new financial services businesses added 25,000. Given the weakness in these sectors right now, it is possible that these numbers will be revised down later.


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