Looking under the hood of jobs and inflation numbers

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**Kimberly Adams** (0:31)
Going beyond the headline numbers on jobs and inflation.
From Marketplace in Washington, I'm Kimberly Adams. The Federal Open Market Committee decided to hold interest rates steady yesterday. The Fed has a dual mandate from Congress to manage inflation and maximize employment. The current unemployment rate is 4.2 percent, down slightly from 4.3 percent in May. But economists say there are warning signs in those numbers.

**Betsy Stevenson** (0:57)
Hi, I'm Betsy Stevenson, and I am a professor of economics and public policy at the University of Michigan.

**Corey Staley** (1:03)
I am Corey Staley, and I am a senior economist with the Indeed Hiring Lab.

**Kimberly Adams** (1:07)
Stevenson and Staley both point to something you may have heard about. The term is a low-fire, low-hire labor market. Not a ton of people are getting jobs, but even fewer people are leaving their current jobs, which means the labor market is kind of stagnant.

**Betsy Stevenson** (1:24)
It's pretty great in that we're employing most of the people who want to have a job. It's pretty challenging if you find yourself unemployed because there's not a lot of openings out there.

**Kimberly Adams** (1:34)
So how does this show up in the data? The number of people who are unemployed long-term, that's six months or more, has risen by 286,000 people in the past year, up to 1.9 million. That's up by more than 50% compared to a few years ago.
So even if the headline numbers on the jobs report don't look awful, this kind of nuance reflects economic pain for many households.

**Corey Staley** (2:00)
How are American workers, how are American households experiencing and feeling about the economy is a really important thing to be watching right now, because you can create all the jobs in the world, but if households are struggling, that's going to really suppress economic growth in the long run.

**Kimberly Adams** (2:18)
That was Corey Staley from Indeed and the University of Michigan's Betsy Stevenson.

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**Kimberly Adams** (3:42)
We talked earlier about the jobs part of the Fed's dual mandate. The other side is managing inflation, like the PCE numbers we got this morning. To help the Fed and everyone else looking at this data have the most accurate information possible, the government updates its methodology every so often. This fall, the Bureau of Economic Analysis will change how inflation is calculated for certain categories and apply those changes retroactively to 2021
That means years of inflation data will be revised slightly.
Dr. Erica Groshan is Senior Economics Advisor at the Cornell University School of Industrial and Labor Relations and a former Commissioner at the Bureau of Labor Statistics. She joins me now with more on these changes. Dr. Groshan, welcome.

**Erica Groshan** (4:27)
Thank you. Happy to be here.

**Kimberly Adams** (4:29)
We get changes to how inflation is measured every year, but can you explain what's changing in particular this year in how the Bureau of Economic Analysis estimates inflation?

**Erica Groshan** (4:40)
The researchers, the analysts at BEA have been working all year long on looking at all the numbers and they have come up with some ways to improve the numbers. And that is ongoing because these statistics are never one and done. The economy is changing and the number is changing and technology is changing and data sources are changing. So every year the BEA has to make these adjustments. And so this year, they decided to change three different portions of this measure of inflation.