Mysterious Farm Job Machine At Work

November 5, 2002 ( - What appears to be a red-hot farm jobs creation machine has cushioned the economy somewhat despite persistent labor market weakness.

The problem, according to a Reuters news report, is that not everyone believes that the farming sector actually generated 415,000 jobs since June, a 13% rise that is easily the fastest job growth in decades.

While the farm sector makes up only 2.6% of total employment, its surge has accounted for almost fully half of the 861,000 new civilian jobs generated since June, Reuters said.

The elevated agricultural job numbers have somewhat dampened the nation’s overall jobless rate, which Reuters said would have climbed to 6% in October without the farm jobs created since June. In reality, the jobless rate fell in September and then inched up to 5.7% last month.

If it had topped 6.0 %, consumer confidence might have suffered far more, bond yields tumbled and the case for an interest rate cut — now expected on Wednesday from the Federal Reserve — might be that much clearer, Reuters said.

The US Department of Labor (DoL) uses a monthly survey of 60,000 households to compile the unemployment series, in contrast with the monthly payrolls figures, which come from an established survey of around 350,000 businesses.

In recent months the unemployment rate has diverged from the trend in payrolls, dipping from 5.9% in June to 5.6% in September before edging up to 5.7% last month, Reuters said.

At the same time, payrolls growth has been muted at best, running at levels, which typically would be associated with a rise in the jobless rate, according to the Reuters story.