Confusion at the Transcript

Submitted by Rich Toscano on April 16, 2007 - 8:59am

The Bureau of Labor Statistics released its monthly employment survey results last Friday. According to the survey, the 180,000 new jobs created in March brought the nationwide unemployment rate down to 4.4 percent.

But this good news has been completely misinterpreted by local economic pundit George Chamberlin. Chamberlin, who serves as executive editor at the San Diego Daily Transcript, had this to say in his Friday column:

Most U.S. financial markets are closed today in observance of Good Friday. But, that didn't stop the Labor Department from issuing a strong report on the nation's job market. Payrolls in March rose by 180,000, well above expectations. And, January and February reports were revised to show a total increase of 32,000 jobs. Add all those jobs together and you can see why the unemployment rate dipped to 4.4 percent, the lowest since October. The last time the jobless rate was lower was in 2001. Sure doesn't sound like an employment report for a country that many people suggest is on the brink of a recession. [emphasis added]

Chamberlin is correct in noting that last time the unemployment rate was below 4.4 percent was in May 2001. What he fails to mention is that in May 2001, the nation was two months into a recession.

The fact is that the unemployment rate almost never rises substantially until after a recession has already begun. (See the excellent chart generator for a visual). Low unemployment is good news, of course, and a low jobless rate does not by any means imply that a recession is near. But Chamberlin’s suggestion that low unemployment rules out an imminent recession is completely lacking in any factual basis.

Chamberlin managed to make a second misleading statement in the very same column, writing the following paragraph about the a new foreclosure website and the “so-called real estate bust”...


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Submitted by jg on April 16, 2007 - 8:48pm.

Very nice data-based rejoinder, Rich.

But, I warn you, you are about to get yourself dropped from the Chamberlin family Christmas card list!

Submitted by greekfire on April 17, 2007 - 12:22am.

Rich, Excellent insights and expose of the last stronghold of the real estate bulls: employment. As I have said before, this is the last pillar holding up the teetering housing bubble...and you have put another big crack in it. I don't know how you came up with the lagging correlation between unemployment and foreclosures, but I am liking it. Perhaps JG has some nice graphs up his sleeve on this topic that he can share with us.

Any discerning reader worth his salt will know that George Chamberlin is nothing other than an industry blowhard...a card-carrying real estate hack. He is the same person that used days on market as part of his argument against those who were saying the housing bubble was bursting in December 2005:


Sorry for posting the entire URL...the hyperlink feature appears to not be available in rich-text mode and I am not of sound mind to code :^).



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