Monthly unemployment rates aren't set in stone

If you assume each month's unemployment rate is a fixed number, think again.

If you assume each month's unemployment rate is a fixed number, think again.

Each year at this time, the Labor Department's Bureau of Labor Statistics does a review to make sure its monthly unemployment figures best reflect the labor force and the broader economy. That review can produce changes in previously reported unemployment rates.

The government on Friday released its revisions of monthly employment rates stretching back to 2006. The changes were few. The post-recession peak so far is still 10.1 percent, in October 2009.

But the unemployment rates for both November and December 2009 turned out to be a tad lower: 9.9 percent for each, rather than the 10 percent the government previously reported.

Changes to the rates occur because the government aims to remove seasonal "noise" from the employment numbers. That "noise" can occur when, say, lifeguards are hired in June and let go in September.

Those seasonal fluctuations don't really reflect the health of the economy. So the government tries to remove the noise through its "seasonal adjustment" process. It's intended to capture the most accurate picture of underlying trends in the economy.

Few changes were made to last year's figures. Unemployment rates remained the same in eight of the 11 months reviewed.

The rates in April and May turned out to be bit lower. April's rate is now 9.8 percent, down from the 9.9 percent first reported. May's rate is 9.6 percent, lower than the previous 9.7 percent.

The unemployment rate in October, though, nudged up to 9.7 percent, from 9.6 percent. The government didn't explain any of the changes for individual months.

In early February, the BLS will release once-a-year revisions in its count of monthly job creation. Those revisions will be based on more complete information from employers, such as unemployment insurance tax records.

The economy added a net total of 1.1 million jobs in 2010. That total will likely turn out to be lower — by 366,000, according to a preliminary calculation the government made in the fall. The actual number will be released next month with the employment report for January.

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