March 2012: Quirks in jobless data could bite Obama

I read an article I wanted to share while researching the formulas on how the jobless rates are calculated. 


SUMMARY:
Several Wall Street economists believe the government is mismeasuring seasonal shifts in the labor market, and suggest the jobless rate's sharp winter drop was partly an illusion.

"We think that the improvement over the last few months dramatically overstates the underlying improvement," said Andrew Tilton, an economist at Goldman Sachs in New York.

The government uses computer programs to filter out seasonal changes like the drop in construction jobs every winter. But because the computer programs make adjustments based on what happened in the recent past, the millions of jobs lost during the winter of 2008-2009 may have tricked the machines into expecting the winters that followed would be similarly bad.

And when the raw data for jobless rates did not rise as much as expected this winter, the computer programs appear to have over-adjusted the data downward, resulting in big drops in unemployment


Here is the article that goes into how the jobless rates are calculated:
Analysis: Quirks in jobless data could bite Obama