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About that unemployment rate...

A month ago, when an encouraging jobs report was released, Mitt Romney went on the attack -- it didn't matter how many jobs were created, he said, what matters
About that unemployment rate...
About that unemployment rate...

A month ago, when an encouraging jobs report was released, Mitt Romney went on the attack -- it didn't matter how many jobs were created, he said, what matters is the unemployment rate. In that case, job growth exceeded expectations, but since the jobless rate ticked up a fraction of a point, the GOP candidate felt somehow vindicated.

This morning, Romney and Republicans are saying the exact opposite -- what matters is how many jobs were created, not the unemployment rate, which inched lower.

When it comes to intellectual seriousness and consistency, this is a ridiculous way of presenting information to the public.

That said, for many Americans who don't keep up with the details, the unemployment is, for all intents and purposes, the only figure that matters, because it's what they most closely associate with the health of the economy. And as of this morning, the unemployment rate is down to 8.1% -- the lowest it's been since President Obama took office.

I received some emails this morning asking why this isn't great news. After all, for quite a while, Republicans have incessantly pointed to this figure to attack the president, and with the jobless rate nearing a four-year low, Democrats, the argument goes, should be thrilled.

I'm afraid it's not that simple.


When the unemployment rate goes down because of a sharp increase in newly-employed Americans, that's good news. When the unemployment rate goes down because more Americans have left the workforce and have given up, that's the opposite of good news.

It's why the unemployment rate itself may be widely recognized, but it's hardly the best metric -- when the economy grows, there are more job openings, and more workers re-enter the job market, the unemployment rate can actually go up, even though the conditions are getting better. Likewise, the unemployment rate can go down when things are getting worse. That's not what always happens -- I don't want readers to get the impression that a growing unemployment rate is somehow something to celebrate -- but it's one of the factors that makes this specific metric, on a month-to-month basis, dubious.

When the monthly jobs report is published, the number to keep an eye on isn't the one that reinforces partisan's preferred political narrative or makes Mitt Romney happy. The number to watch is how many jobs are being created.