Many pundits, members of the media, and elected officials (or their spokesman), cite employment data showing “fewer jobs lost” in October (or in the case of the state, September) than in previous months – and then claim that is a sign the economy is turning around. This is a poor interpretation of the data, and needs debunking.
Lets put it in micro-economic terms. Say I owned a business, and laid off 100 workers in September. In October, I laid off another 50 (without any new hires). Would anyone suggest my business had improved? No, rather, it has gotten worse, as I can support fewer workers.
In contrast to self-serving charts trying to demonstrate economic recovery base on “fewer jobs lost”, take a look at charts of the total number of non-farm payroll jobs, in both the US and Pennsylvania, since Dec. 2007.
It is true that employment tends to be a lagging variable – i.e. we could continue to see job losses after the recession is over. Nonetheless, it is impossible to look at the continued decline in the number of jobs in the nation, and in the state, and suggest that is indicative of an economic turnaround.