SCOTT DETROW, HOST:
We got a grim report on the job market this past week. It showed that U.S. employers added just 22,000 jobs in August, and the economy actually lost jobs in June for the first time in more than four years. But how much stock should we put in those numbers? President Trump likes to trumpet the jobs report when it's good, and when it's not, he is prone to shoot the messenger. NPR's Scott Horsley is our messenger when it comes to the economy, so we brought him on today to talk about the numbers we use to measure the nation's economic health. Hi, Scott.
SCOTT HORSLEY, BYLINE: Hi, Scott. Good to be with you.
DETROW: The latest tally shows employers cut jobs in June, but two months ago, the government was much more upbeat, saying employers had added almost 150,000 jobs that month. So let's start with this. How much can we believe the numbers when they bounce around so much?
HORSLEY: It's probably wise to take all of these numbers with a grain of salt. There is a trade-off between information that's really timely and information that is more complete. Every month, the Labor Department goes out and surveys about 120,000 businesses. They ask how many people are on the payrolls. Some businesses respond right away. Some take a little longer. Some don't answer at all. Over time, like three months, we get a pretty complete picture of what's going on. But most of us are impatient, and we don't want to wait three months until every last survey is tallied. So most of the time, the revisions offer a sharper focus but don't radically change our understanding of the economy. Sometimes, though, the picture - it looks very different. And that seems to happen more often when the economy is going through some kind of transition, either speeding up or, in this case, apparently slowing down.
DETROW: But does that mean the number crunchers blew it last time?
HORSLEY: I wouldn't say they blew it. I would say they offered the best information that they had at the time, and it didn't prove to be complete. You know, the Labor Department is very transparent about how they go about their work, so you can assess how much stock to put in these numbers as they come out month to month. It's also helpful to look at the trend line, which can help to sort of smooth out the noise from month to month. A single month's jobs number might be a fluke, but now we've had four months in a row with pretty anemic job growth. So I think it's safe to say something real is going on here.
DETROW: We talk about this with political polling. Is it harder when it comes to this kind of measurement to get the numbers right than it used to be?
HORSLEY: It's actually quite similar to what we see with political polling. Overall, with the economic data, the revisions have actually gotten smaller over time, but they do face some of the same challenges that political pollsters do. Fewer people are answering the surveys. And just like a political poll can be skewed if, say, Republicans answer the phone more than Democrats do or vice versa, the job survey can be skewed if the businesses that respond are growing faster or slower than those that don't. Another factor is that the Labor Department, like the rest of the federal government, has seen a lot of job cuts under the Trump administration. So that's affecting the quality of the data. The monthly inflation report, for example, now uses fewer actual price checks than it used to because there just aren't enough people to carry out the work.
DETROW: And that gets to something I was wondering this past week and I want to ask you about. A month ago, the president was so unhappy with the jobs report, he fired the Labor Department official who oversees these numbers. Did that change anything?
HORSLEY: No, nothing has changed so far, and in a way, that's reassuring. We know that the jobs numbers are still being gathered by career professionals, and there's no sign they're under pressure from the White House to, say, put out a rosier report. If they were, I think we would hear about that very quickly from government staffers.
By the way, in addition to the monthly revisions that we get on the jobs numbers, we also get an annual revision that is based on much more complete data from state tax records. We're going to get a first look at that annual revision this coming week. And it's expected to show that over the 12 months ending in March, job growth was substantially slower than initially reported. Again, that's not a sign that anyone was cooking the books. It's just a reminder that, you know, we live in a big, complicated economy and sometimes it takes a while to get a clear picture of what's going on.
DETROW: That's NPR's Scott Horsley, who covers that big, complicated economy for NPR. Scott, thanks a lot.
HORSLEY: Great to be with you.
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