Is jobs outlook really up?

Forgive the headline writers this morning. Having to come up with a half-dozen words to sum up a batch of confusing and often contradictory employment reports required real finesse. Most of the papers went the conventional wisdom route - the national employment situation is improving, and if not for those pesky blizzards back east, we would have had job growth in February. We'll certainly see it in March.

Fine. But then comes release of the January employment numbers for L.A. County (running one month behind the national data), and they show that 73,700 payroll jobs were lost from the previous month. This is a very big number - the entire U.S. only lost 26,000 jobs that month, and California as a whole actually gained 32,500. Now, it's worth noting that this is a flaky time of year to be measuring jobs. It's when the government goes through the annual process of adjusting all its previous reports, a tortuous exercise called benchmarking. In a normal economy, none of this number- shifting would be all that important to 99.99 percent of the population. But at a time when so many people are so desperate to find work, these numbers have become front-page news, a prominence that probably surpasses their relevance. As much as everybody wants to know the answer about employment, there is no absolute answer, and month-to-month snapshots are of only limited help.

Consider the national jobs report for February. The unemployment rate stayed level, at 9.7 percent, which to some illustrated that the previous month's drop from 10 percent was not a fluke. "Flat Jobless Rate a Sign the Worst of the Slump is Past," was the NYT headline. The thing about these numbers, however, is that the interpretations are largely dependent on the weather. If you think the snowstorms had a big effect, you're likely to be upbeat about the jobs picture, figuring that the several days of business closures held down employment. If you think the snow had relatively little effect, you're likely to be more doubtful.

Barron's columnist Alan Abelson, hardly who you would call a conventional thinker, was among the doubters:

No argument, we did have more than a sprinkling of snow. But as the Bureau of Labor Statistics forthrightly explained, "in order for severe weather conditions to reduce the estimate of payroll employment, employees have to be off work for an entire pay period" and not be paid. Workers who drew pay for even one hour during their pay period (typically, two weeks to a month) were counted as employed in February. Too, the BLS points out, some unknown number of workers could well have been added for clean-up and repairs after the storm.

There's another problem with trumpeting the 9.7 percent rate. It ignores a broader measure of unemployment that the government also releases, what's referred to as the "U-6" rate. That covers folks who have given up looking for work or have part-time jobs or are otherwise underemployed. For February, U-6 rate was 16.8 percent, up from 16.5 percent the previous month. Why is that number any less relevant than the standard unemployment rate that everybody reports?

Abelson cites two economists, Philippa Dunne and Doug Henwood, who call the February report "more of the same -- minor losses that look good compared to the bloodletting of early 2009, but rather sad compared to a textbook recovery." They say that the labor market "continues to stabilize, but it's not really turning around." Now, you can argue that these are just two analysts out of thousands. But their summation rings true. Intuitively, you know it does. Has your next-door neighbor found work? Your uncle? Have construction cranes been popping up around L.A.?

The labor market is indeed stabilizing. Unemployment, both nationally and locally, has peaked. But we've known that for some time. The key question - and one that none of these reports can truly address - is how long it will be before the jobless rate falls to anywhere near normal levels. And how will people who are out of work cope between now and then?