Let me add a few explanatory notes to my previous post.

The consensus forecast for the jobs report was 120,000, so the 308,000 number really surprised people.

The monthly payroll number will revised next month and the month after that. The reason is that the Labor Department does not do a precise census but rather uses an econometric model based on large scale sampling. Even though they use a sample 600,000 in size, the model has a 90% chance of being accurate to within 270,000 jobs. In other words, there is a 90% chance that the reality of payroll jobs lays between an increase of 38,000 and an increase of 578,000. Knowing the numbers and knowing what the numbers mean are two different things.

This number is exactly what it says it is - non-farm payroll jobs. Democrats have seized upon this statistic in the past as proof that the economy has been hemorrhaging jobs under the policies of President Bush, and yes, there had been a decrease of as much as 1.8M payroll jobs at one point. However, this statistic is not the best measure of employment. Why? Because it doesn't measure all jobs. If you are under 18 years of age, if you work on a farm, if you work for cash, if you are self-employed, or if you work in a family-owned business, you are not counted. The Labor Department's household survey does measure all employment and has shown job growth for the last 18 months but it's not the preferred measure. Why? It's monthly sample is 50,000 and is even more inaccurate than the payroll survey. The lesson is: these are imperfect tools and are better for determining general trends than precise models.

Finally, if this trend in job growth continues, and I think it generally will, the Democrats are going to have to rethink how they approach the economy as a campaign issue. They could run against increasing prosperity, which is likely but a losing choice, or they can formulate an alternative policy which would increase investment and job creation, which is very unlikely but their only hope. Otherwise they can abandon the economy as an issue and fight President Bush on his turf, national security and the war on terrorism. In any case, the economic data are placing the Democrats in an increasingly difficult position.