RS 8: Unemployment Rate (That Rhymes!)

How do YOU keep a secret? Do you lock your door or hide in your closet so you don’t speak? You obviously can’t tell anyone, not even your significant other or best friend.

Indicator of all indicators: the job numbers….the unemployment rate. They come out every first Friday of the month and people are always DYING to see them!

If the numbers are bad and people know that the market is going to get bad, people can premeditate their stock selling and could sell shares before the market goes down in orders to make million or maybe even billions. If the numbers leaked out, the unemployment rate comes out too early, as it did in November of 1998, people can utilize this information for insider trading. The payroll numbers for October were found accidentally on the government website. Ray Stone, an economist, was a superstar that month. He was on television shows even! The Bureau of Labor Statistics ended up putting up the numbers an entire day earlier because of embarrassment practically, and also put out an 81-page report for how to prevent this sort of thing for happening again. An NPR representative wasn’t even allowed to see an economist’s office suite because of the confidential information in it! Even some fellow employees don’t have access. Karen, an economist at the BLS, even admitted that they have to take out the trash on their own, and that if they have IT issues, they have to fix them themselves!

People in this industry will only know the numbers 3 days before they come out! She isn’t allowed to even talk about her day with her parents. “The first rule about working at the BLS, don’t talk about working at the BLS.” Reporters have specific methods of how they can report the BLS reports. Code words are used to do microphone checks, and the word is changed each time. The reporters are given the code aloud, and a worker at the BLS counts down from 5 after the word is said to signal the reporter as to when they can speak and say the reports! How heinous! As crazy as this system may be, it obviously works. It ensures that each and every journalist and media branch admits the information to the public at the same time.

The jobs report can be really great and helpful, but often it’s best to take the unemployment rate with a grain of salt. Seasonal adjustment affects the number, in the summer more teenagers are out of school looking for jobs which changes the rate semi-dramatically. It’s a hot number to know but how important is it really on a monthly basis?