“I wasn’t kidding,” the pugnacious former CEO of General Electric said in an interview.
The 76-year-old retiree riled up the Twitterverse this morning with a tweet that said, “Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change numbers.”
The tweet came after the Labor Department reported the country’s unemployment rate fell to 7.8% in September, the lowest since President Barack Obama was inaugurated in January 2009. Mr. Welch had set up his skeptical take with an earlier tweet Thursday night.
“Tomorrow employment numbers for Sept. with all the assumptions Labor Dept. can make..wonder about participation assumption??” Mr. Welch wrote. He then added “at 7.9 it would be Chicago and labor Sec in action.”
“I am doing nothing more than raising the question,” Mr. Welch said. “It’s fact-based.”
Here are Mr. Welch’s facts. To hold the unemployment rate even as the population grows, he said, the economy needs to add between 150,000 and 200,000 jobs a month.
“We haven’t reached those numbers at all,” Mr. Welch said. Employers added a seasonally adjusted 114,000 jobs in September, down from a revised 142,000 jobs in August. The economy, however, has added 143,000 jobs a month after revisions this year.
The former GE chief also raised questions about job growth shown in the household survey, which is the source of the unemployment rate. That survey showed a healthy jump of 873,000 jobs in the month, at odds with the 114,000-job gain in the survey of businesses.
“The economy doesn’t feel like it added 873,000 jobs in September,” Mr. Welch said. “There are a number of things here that are open to discussion.”
Still, several economists have pointed out exactly how the unemployment rate can diverge on a month-to-month basis from nonfarm payroll growth. Considering the household survey showed job losses throughout the last few months, September’s sharp gain could be a catch-up from those recent reports.
The establishment survey also tends to cover large and mid-sized businesses and doesn’t catch the small startups that are adding a few workers here and there, and whose hiring might be reflected in the household survey.
Source: The Wall Street Journal