The drop in the unemployment rate to 9.7% is an artifact of seasonal adjustment: Employment on the Household Survey actually fell from 137.953 million to 136.809 million. Seasonally adjusted, it rose from 137.792 million to 138.333 million. That is, the actual number of people who said they had jobs fell, but by less than would occur in a typical December-to-January period. Temporary hiring during the Christmas season tends to bulk up the employment numbers, which normally fall during January.

What if the temporary jobs weren’t there in the first place? In that case, seasonal adjustment wouldn’t apply; the normal December-to-January tick would be swamped by the structural change. It’s sort of like seasonally adjusting rainfall patterns during Noah’s flood.

I don’t think that government statisticians are faking the data; they simply are running the old statistical routines out of the canned econometrics program to generate seasonal adjustment factors which are–to put it mildly–a lot less meaningful in the present environment than in a nomral economy.

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