Tell me what’s wrong with this picture. Even better, ask your teenager what’s wrong with it.
Last Friday, the Labor Department reported that an exceptionally large number of jobs were created in January and, as part of that boom, the biggest job producer was the retail industry.
Yes, that’s right.
What Labor said was that the “retail trade” created an astounding 46,000 jobs in the first month of the year.
That info was “prominently displayed” on the second page of a press release that was digested by investors and journalists around the world.
And, as far as I can tell, everyone regurgitated that number without raising any objection.
I suggest asking a teenager because if your kid spends any time roaming a mall — any mall in the US — they’d already know that retailers don’t hire workers in January.
That’s when stores start cutting back on sales help even if they did well during the holiday season.
It is also the time when a lot of major retailers simply shut stores and lay off thousands of workers.
Anyone who reads this column regularly knows where I’m going with this. That’s right: seasonal adjustments.
So what really happened in the retailing job market? Well, it wasn’t an increase of 46,000 jobs, that’s for sure. In fact, before Labor fiddled with the numbers there was a loss of 546,300 retailing jobs.
Again, there wasn’t an actual gain of 46,000 jobs, but a loss of 546,300 jobs. Thank you seasonal adjustments.
The huge loss makes a lot more sense. You could find these numbers yourself if you are a statistics junkie without better things to do, by going to http://www.bls.gov/ces and look for table B-1b.
But I’ll assume you probably have the dishes to do or the dog to walk so you won’t.
So here are some more specifics about this crazy retailing figure that might entertain you for a second or two. Labor, in claiming that 46,000 retailing jobs were created last month, added that clothing retailers hired 18,000, appliance stores 8,000 and home furnishing stores 6,000.
Wow, isn’t that great!
Nope, it isn’t. Again, those figures were prominently displayed on the second page of the press release that caused a big jump in the markets on Friday and probably made some folks feel better about the economy.
So what were the real numbers before Labor dabbled in seasonal adjusting magic? Clothing retailers laid off 125,000 workers; appliance stores canned 5,400 and home furnishing retailers pink-slipped 6,500.
How do awful numbers like those turn into good news? The same way an actual loss of 2.9 million jobs in January turned into a seasonally adjusted, optimism-generating gain of 227,000 jobs.
Labor’s computers were probably expecting even bigger job losses in January than actually happened. So the less-bad job losses translated into the good news that the public got to read about.
But why were the job losses less than expected? I’ll guess companies — including retailers — didn’t hire as many workers in December as they normally do. So there were fewer people to let go after the holidays.
If I didn’t explain this well enough please ask your kids. They’ll know.
I’ll leave you with this. Remember when your children told you they were failing math but then came home with a C?
You were thrilled, right, because your expectations were lowered. Now you know how Labor’s computers felt in January.