Seasonality in labor markets — and political manipulation of the results

At the end of my Savannah Morning News column today, I talk about the “absurd” characterizations in the Georgia Department of Labor’s press release about employment in the state.

Here I’m going to expand on some of those thoughts.

As anyone who thinks about it will understand, there are strong seasonal factors affecting employment. Economies typically add fewer jobs — or lose jobs — after Christmas, when retail demand falls sharply, travel declines, and families try to repair their balance sheets. We typically add jobs through the spring, only to see another actual decline or sharp drop in the growth rate after the school year ends. Lots of part-year employees are suddenly out of work, more students enter the labor force, and so forth. The trend reverses itself in the late summer or early fall.

This is all pretty obvious, but you wouldn’t know it from reading the press releases from the Georgia Department of Labor this year, which have been flatly dishonest for several months now.

And press across the state has parroted those dishonest statements.

The confusion comes larger from the fact that the state adjusts some of its data for seasonality, but other data points are not adjusted for seasonality. Now, this shouldn’t be confusing — it’s hardly rocket science! — but lazy reporting and a poor grasp of data can be a dangerous combination in a democracy.

EXAMPLE #1: The Georgia Department of Labor press release in June for May employment data: Georgia’s jobless rate unchanged at 9.8 percent in May; job growth continues.

The press release reports the seasonally adjusted unemployment rate as 9.8%, unchanged from April. That data is already adjusted for seasonal changes.

But then there’s this: “The number of payroll jobs increased 3,400 to 3,834,500 in May, up one-tenth of a percentage point, from 3,831,100 in April.” That data is not seasonally adjusted — that’s the “job growth” from the press release title. And that’s a terrible number. Since we’d expect employment to be pretty robust in April, even in a weak economy, an addition of .1% is lousy, lousy, lousy. But you wouldn’t know that from the press release, which includes this upbeat characterization for Labor Commissioner Mark Butler: ““More businesses are slowly beginning to expand their workforce, illustrating a gradual increase of confidence in the economy.”

EXAMPLE #2: The Ga. DOL press release from May re April data: “Georgia jobless rate drops below double digits in April; job growth continues”

Again, Butler conflates the seasonally adjusted unemployment rate with the raw data regarding job growth:

“Not only is this the first time in nearly two years that Georgia’s unemployment rate has dipped into the single digits, but this is also the third consecutive month of job growth,” said State Labor Commissioner Mark Butler. “This developing trend shows increasing confidence in the economy.” The last time the state’s rate was below 10 percent was in June 2009, when it was 9.8 percent.

Yes, sort of good news that the unemployment rate has dropped (even though the key reason for the decline is fewer Georgian seeking work rather than a significant increase in jobs), but bragging about adding jobs in months that are among the best of the year for employment? Really?

EXAMPLE #3: July’s release re June data: “Georgia’s jobless rate rises slightly to 9.9 percent in June”

“The unemployment rate inched up slightly because of normal seasonal factors, primarily involving the end of the school year,” said State Labor Commissioner Mark Butler. “Non-contract school workers, such as bus drivers, lunchroom and janitorial workers, are usually laid-off during the summer school break. Also, new graduates began searching for jobs and are counted as unemployed while doing so.”

But the unemployment rate has already been adjusted for these very seasonal factors.

EXAMPLE #4: August’s release re July data: “Georgia’s jobless rate rises to 10.1 percent in July”

State Labor Commissioner Mark Butler said today that Georgia’s seasonally adjusted unemployment rate rose to 10.1 percent in July, up two-tenths of a percentage point from 9.9 percent in June. The state’s jobless rate was also 10.1 percent in July a year ago.

The July increase, as in June, was due primarily to the traditional seasonal layoffs, with about 80 percent of them in state and local education.

This is clever sleight of hand. The press release begins by talking about the seasonally adjusted unemployment rate — which is increasing — and then transitions into talking about the raw number of job losses in July. The seasonal factors do certainly impact the raw data, but the unemployment rate has been adjusted already for those factors.


I’ve seen similar problems in other states, including misleading statements in recent press releases from Texas and from South Carolina.

But this is when the press needs to step up and complain. You can see a good example of the problem in this piece at the AJC, which jumbles seasonally adjusted data with data that is not seasonally adjusted and which makes no mention of seasonality other than to paraphrase Commissioner Butler’s misleading statement about it.