There was quite some buoyancy in the commentary on the US economy last week.

The US Bureau of Labor Statistics (BLS) released it’s monthly jobs data. Because the Federal Reserve has said it is more focused on employment than inflation, this is now the most watched and anticipated US economic data each month.

The official BLS news release started thus: “The unemployment rate declined from 7.3 percent to 7.0 percent in November, and total nonfarm payroll employment rose by 203,000.”

“Obama was buoyed too by news on Friday that the U.S. jobless rate hit a five-year low of 7.0 percent.” said Reuters. So, as you would expect, newspapers all over the place parroted Reuters news release, presumably without looking any deeper.

The New York Times reported on the story this way:

After years of frustrating fits and starts in the wake of the financial crisis and the Great Recession, the United States economy finally appears to be generating jobs at a healthier, more sustainable pace that many analysts now think will continue into 2014. The official unemployment rate fell in November to its lowest level since 2008.

Employers have hired at least 200,000 workers in three of the last four months, including 203,000 in November.

And the normally taciturn (and accurate) Economist newspaper reported this:

The American economy is plugging along at a surprisingly steady clip and dragging employment with it as it goes. According to new data from the Bureau of Labour Statistics, the American economy added 203,000 jobs in November. That’s a shade above the average of 195,000 net new hires per month over the past year (though not meaningfully so given the margin of error). In the 12 months to November private firms added 2.3m new workers: not the best performance of the recovery but well above average.

The jobs figures are just the latest in encouraging news from around the economy.

Sounds good. What’s not to like about this? Unemployment down from it’s peak of 10% in 2009 to 7%, and more than 2 million new jobs in the last year.

Here’s what’s not to like.

In the exact same release from the BLS are these figures.

US civilian institutionalised population, now 246,567,000. One year ago 244,174,000. An increase of 2.393,000. Fair enough, the population rose. We all know that.

But then this. US civilian labor force, now 155,294,000. One year ago 155,319,000. A decrease of 25,000.

That’s right. The population grew, but the workforce shrank. What sort of economic growth is that?

Hardly cause for the politicians and the media to be celebrating.

Go back up and re-read the quotes from the NYT and The Economist above. Spin, group think, and delusion at their finest!

(If you missed it, you might want to check my more detailed explanation of the spin here.)