A Chrysler Group LLC employee works on a 2012 Jeep Compass on the production line at the company's assembly plant in Belvidere, Illinois, 2 February 2012. Daniel Acker / Bloomberg / Getty Images

By Massimo Calabresi
3 February 2012

Some Obama opponents are struggling to find a cloud in the silver lining of January’s jobs numbers, which estimated that there was a 243,000-job boost and a big drop in the unemployment rate, from 8.5% to 8.3%, last month. Their biggest gripe focuses on the size of the labor force: As the unemployment rate has trended down over the last few months, anti-Obama commentators have argued that the official percentage for those without jobs is deceptive because the Bureau of Labor Statistics doesn’t count those who have stopped looking for work. In Friday’s report, they found a sharp increase in that group: More than 1.2 million people joined the non-job seeking pool of working-age Americans last month.

I was ready to join the pessimists Friday morning when I saw the sharp drop in the unemployment rate, but for a different reason. The January unemployment report, I had been forewarned by BLS, was the first to be based on models using 2010 census figures. (All these numbers are guesstimations based on surveys of smaller samples taken around the country). A big shift up or down in the unemployment rate, I thought, could be explained by the change in the overall population of the country, reflected in the census numbers.

But the census adjustments actually work against my theory and that of the Obama-detractors. The demographic adjustments had no effect on the unemployment rate, says Mary Bowler, the resident expert in these matters at the BLS. And when it comes to labor force estimates, the steep jump in the number of those not seeking work came entirely from the census adjustment, which added 1.25 million people to that group. If you take out the census adjustment, the labor force numbers stayed essentially the same, as reflected by the labor force participation rate of 63.7%. In other words, the spike in the number of people no longer looking for work is entirely the result of some people at the Labor Department adding numbers to their spread sheets rather than an actual observed shift anywhere in the real economy. […]

January Jobs Report: Good News for the Economy, Bad News for the Pessimists

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