Jobs report too messy to make much sense of

Or to take all that seriously. See, the Labor Department made unusually large revisions to the size of the U.S. population - a bean counter procedure that happens at this time each year and which tends to garble up the data. From Real Time Economics:

The Labor Department -- using updated Census Bureau data -- determined that its 2010 estimates of the size of the population had been 347,000 too high, its estimates of overall employment in 2010 had been 472,000 too high and that its estimates of people who were unemployed or not in the labor force were also off. The adjustment makes it hard to decipher the underlying trend in the levels of the labor force, employment and unemployment in January.

In a nutshell, the 2011 data can't be compared all that well with the 2010 data. Eventually, it gets straightened out, but for now it's another reason to marginalize January's report. That, and the weather. By the way, NYT columnist Floyd Norris sees parallels between the current employment situation and what happened in January 1983, when the jobless rate fell to 10.4 percent from 10.8 percent a month earlier (the rate for January 2011 fell to 9 percent from 9.4 percent):

The Reagan administration then thought the unemployment rate was likely to stay above 10 percent throughout that year. Now the Congressional Budget Office forecasts that the rate will stay above 9 percent this year. In fact, the rate at the end of 1983 turned out to be 8.3 percent. Before last month's report, there had been only seven monthly reports during the previous 45 years that showed a decline of at least 0.4 percentage points. Three of them were in 1983.

There are other similarities. Then, as now, the stock market was surprisingly strong, but many people discounted that because of the obvious woes of the economy. I don't have a scientific measure, but I know that my e-mail inbox is getting a lot of messages offering conspiratorial explanations for the strong stock market. One reader asked if I had any evidence that Chinese manipulation was causing American share prices to rise. He did not respond when I asked why the Chinese would want to do that.

There are also many differences between then and now. The report on how many jobs were added during the month -- which got much less attention in those days -- was strong in January 1983, and disappointing last month, when it showed an increase of 103,000.

Normally, this sort of stuff would only interest economists and a few stray business writers. But since the recovery has been so halting, and since the political ramifications are so significant, these government reports take on an inflated importance - flaws and all.