Okay class, what do we think will happen to employment as the weather turns cold and people lose their jobs in construction, tourism, and other warm weather industries? Yes, that's right -- employment will fall. This is why the good people at the Bureau of Labor Statistics and other statistical agencies invented "seasonal adjustments." We know that some number of people will lose their jobs every fall because of seasonal factors. We also know that many people will get jobs in the spring, when the weather turns warm again. In order to avoid having data that make it appear that the economy is entering a recession every fall and booming every spring, economists try to pull out the normal seasonal fluctuations in the data. Someone forgot to explain this fact to the BBC, which headlined an article on Germany's December employment data, "German Jobless Total Rises Again." Those who take the time to read through the article would discover that the December increase in joblesssness is less than normal for the month, implying that there would be a decline in the seasonally adjusted unemployment rate (correction suggested by withrow). That should be the headline. The article also commits the same sin as the WSJ, reporting the official German measure of unemployment without noting that Germany uses a different methodology to calculate unemployment than the OECD and the United States. BBC gets a bit more slack here, since it is written for an international audience that may be slightly more knowledgable about differences in methodology, but I wouldn't carry that one too far.
--Dean Baker
