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Friday, October 05, 2012

Corrupt like a statistician

I find it amusing that everyone is so skeptical of modern macroeconomic statistics that the Obama administration is preemptively defending itself against suspicions of statistical shenanigans:
The U.S. unemployment rate fell to 7.8 percent last month, dropping below 8 percent for the first time in nearly four years and giving President Barack Obama a potential boost with the election a month away.  The rate declined from 8.1 percent because the number of people who said they were employed soared by 873,000 — an encouraging sign for an economy that's been struggling to create enough jobs.

Labor Secretary Hilda Solis was asked on CNBC about suspicions that the Obama administration might have skewed the jobs numbers to aid Obama's re-election prospects. "I'm insulted when I hear that because we have a very professional civil service," Solis said. "I have the highest regard for our professionals that do the calculations at the (Bureau of Labor Statistics). They are trained economists."
 Ms Soldis would have been more convincing had she feigned being insulted and insisted that the professional for whom she has the highest regard are trained circus clowns.  As I showed in RGD, the margin of reported error between one report and its subsequent revision is often larger than the difference between economic growth and contraction.  In the case of the BLS, the story being pushed is that the "number of unemployed Americans is now 12.1 million, the fewest since January 2009."

What they're leaving out is that "unemployed" is a technical term that does not mean "not working", as the Employment-Population Ratio has declined from 60.6 to 58.7 during that time.  This means at least 5.9 million more Americans are not working than were not working in January 2009.

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55 Comments:

Anonymous 11B October 05, 2012 2:28 PM  

This is probably the last monthly unemployment report before the election. If past history is any guide, the figures will most certainly be revised upward, after the election of course. By that time it won't much matter. O gets to go into the election with unemployment under that 8 percent threshold.

Blogger Survival Gardener, AKA David the Good October 05, 2012 2:30 PM  

Asinine choices by TPTB, once again. They're losing credibility even among the marching morons.

Anonymous Porky? October 05, 2012 2:37 PM  

At WorkDep, 2 + 2 = 5.

But it may be revised downward.

Or not.



Blogger Wagnerian October 05, 2012 2:45 PM  

Reminds me of the Soviet 5-year plans.

Blogger James Dixon October 05, 2012 2:45 PM  

Hmm. 5.9/45=.1311

So since Obama took office, we've been losing something like 131 thousands jobs/month, every month. Yeah, that's a pretty impressive accomplishment given how resilient the US economy has been over the past 60 years. I'm sure he's quite proud of it. It's almost a shame he can't say so publicly.

Blogger Wagnerian October 05, 2012 2:49 PM  

Reminds me of the Soviet 5-year plans.

Anonymous Stilicho October 05, 2012 2:51 PM  

This means at least 5.9 million more Americans are not working than were not working in January 2009.

And that, my friend, is a statistic that matters. Especially since the working Americans support the non-workers as well as themselves.

Anonymous Daniel October 05, 2012 2:52 PM  

Trained economists, to be sure: trained to verify that the sideshow is, in fact, the circus.

See? There is a bearded lady! That proves a dancing elephant!

Anonymous Salt October 05, 2012 2:52 PM  

The Obamatrons are eating the jobs report up. It's manna from heaven.

Anonymous Tschafer October 05, 2012 3:07 PM  

And this comes the very day after Obama lost a Presidential debate by a bigger margin than anyone in history. How very convenient...

Anonymous Stilicho October 05, 2012 3:25 PM  

Uh oh, does this mean that obamaphone lady from Cleveland has to get a job? She will NOT be happy.

Anonymous Noah B. October 05, 2012 3:27 PM  

I never really even consider taking the news seriously anymore. Talk radio and Fox aren't much better, as they still often use feeds from the Associated Press, which I now consider less credible than supermarket tabloids.

Anonymous bw October 05, 2012 3:32 PM  

I'm insulted when I hear that because we have a very professional civil service,"

These people are parasitic, destructive, ignorant liars.
And they feign an appeal to moral authority and good will in an attempt to shut you up. Her "high regard" is nothing more than self justification and flattery. Peer Review writ Large.

Anonymous Azimus October 05, 2012 3:34 PM  

Wow, I hope this wasn't their October surprise...

Anonymous DrTorch October 05, 2012 3:42 PM  

Add this to the revised 360K jobs that "must have been created b/c we don't know what happened to those people who used to be looking for work" last spring, and we've seen over 1.23M new jobs created in a couple of weeks.

Now that's a president for you!

Anonymous Stilicho October 05, 2012 4:02 PM  

James, not exactly. It would be more accurate to state that, on Obama's watch, we've increased the number of Americans without jobs by an average of 131,000 per month.

Anonymous Rantor October 05, 2012 4:07 PM  

But do presidents lose because unemployment is really above 8% or do they win because the BLS lies are below 8%. According to Shadowstats real unemployment is about 25% --- they know who they are even if the BLS ignores them.

Anonymous dh October 05, 2012 4:08 PM  

> What they're leaving out is that "unemployed" is a technical term that does not mean "not working",
> as the Employment-Population Ratio has declined from 60.6 to 58.7 during that time. This means at
> least 5.9 million more Americans are not working than were not working in January 2009.

"They" are not leaving it out. Unless the "they" is the media and/or others who refer to the unemployment rate.

The BLS hasn't changed their methodology significantly in about 12 years. They report the same set of statistics as they have been. There are new ones added on top of the existing ones.

You know this is true since the source for the workforce participation rate is... the BLS.

Anonymous Rantor October 05, 2012 4:08 PM  

Also, based on the number of unemployed people they remove from the list each month, we should have 0% BLS reported unemployment in a few short years.

Anonymous Feh October 05, 2012 4:10 PM  

Those who doubt the Central Ministry for State Statistics are guilty of Anti-Soviet Agitation... oh... heh, heh, sorry comrades, I mean they are racists, sexists, and homophobes.

Anonymous dh October 05, 2012 4:10 PM  

> These people are parasitic, destructive, ignorant liars.
> And they feign an appeal to moral authority and good will in an attempt to shut you up. Her "high
> regard" is nothing more than self justification and flattery. Peer Review writ Large.

True.

However, the flipside is that all of the ignorant "can't be true" types are just as likely to be trying to work the ref in their favor, and appeal to the authority that because it comes from the Administration it must be untrue.

The problem is of course that there are no cogent arguments against the BLS methods or techniques. Everything is open and transparent, including methods, formulaes, policies.

The gist of the complaints are that the 'top-line' unemployment statistic doesn't reflect how bad the economy really is. Which is probably true, but irrelevant to the BLS.

Anonymous dh October 05, 2012 4:18 PM  

> But do presidents lose because unemployment is really above 8% or do they win because the BLS lies
> are below 8%. According to Shadowstats real unemployment is about 25% --- they know who they are even
> if the BLS ignores them.

Saying "the BLS ignores them" is dishonest. The "BLS" doesn't ignore or not ignore people. The statistic reports what it reports. The definition of the statistics haven't changed significantly over time.

The real problem you have is that people don't want to use other statistics that agree with your opinion or view of the world. That has nothing to do with the statisticians who report the numbers.

If you have any actual objections to the methods or reportage or science of the BLS numbers, please, by all means, make your case.

Otherwise, you are complaining about what other people do with the BLS's data. Which is crap.

Blogger IM2L844 October 05, 2012 4:19 PM  

It almost looks as if someone has ramped up a concerted effort to create economic optimism as we get closer to the election. I wonder what the impetus behind this miraculously convenient coincidence could possibly be.

Anonymous YIH October 05, 2012 4:20 PM  

From Mish:
''That said, a closer look shows the entire drop in the unemployment rate can be attributed to a surprise rise of 582,000 in part-time workers. U-6 unemployment remained at 14.7%. U-6 includes part-time workers who want a full-time job.

Still, all things considered, this was the strongest report in four months.

Does it change my recession outlook?

No, it doesn't. A one-month potential outlier based primarily on a rise in part-time employment, accompanied by other weak data does not change my perception.''
The BS is strong in this one. Oops, missed a letter, my bad.

Anonymous WaterBoy October 05, 2012 4:22 PM  

IM2L844: "I wonder what the impetus behind this miraculously convenient coincidence could possibly be."

Whatever it is, it would seem to belie the idea that Obama isn't trying....

Anonymous Salt October 05, 2012 4:32 PM  

ZH has as interesting take. The Strangest Number In Today's Jobs Number

Cutting to the chase: the September surge in Seasonally Adjusted jobs give to 20-24 year old is the biggest in decades. This is on top of the only positive NSA increase in 20-24 year old jobs in history.

Blogger James Dixon October 05, 2012 5:08 PM  

> James, not exactly...

Yes, your wording is more accurate.

Anonymous Gx1080 October 05, 2012 5:49 PM  

That has been one of the most pathetic lies that the Obummers have put through.

Everybody knows damn well that the US's official unemployment rate is just fiction, this is just BS pushed on an election year.

For those who care, U6 rate (the real one) says 14.7%.

http://portalseven.com/employment/unemployment_rate_u6.jsp

Anonymous Beau October 05, 2012 5:53 PM  

I'm waiting for the announcement that the ocean has been healed. Perhaps O's saving that for the final debate.

Anonymous Rosalys October 05, 2012 6:00 PM  

Figures don't lie - but liars figure.

Anonymous YIH October 05, 2012 6:13 PM  

Something else that has perked up the employment figures: Halloween stores. I've seen them in multiple cities since '09. They rent out a unit in a fading strip mall, open mid-September, have their ''going out of business'' sale Nov. 1 & 2, cleared out Nov. 3. The sad part is, those may be the only 2 months the unit gets any rent at all that year.

Anonymous WaterBoy October 05, 2012 6:22 PM  

YIH: "Something else that has perked up the employment figures: Halloween stores."

Those, and the haunted houses. They follow the same business model and usually appear in the same places, even.

Blogger JD Curtis October 05, 2012 6:46 PM  

"
But even more mysterious is the divergence in the two surveys done by the Labor Department.

The Household Survey showed a gain of 873,000 people employed in September - resulting in the surprise drop in the unemployment rate - while the Establishment Survey only showed a rise of 114,000.

Hmmm. Link

Anonymous Sexual Chocolate Imperion October 05, 2012 6:50 PM  

I was registered with the Goyette-Zogby special (via Weiss Research). According to Dr. Z, we are in for 4 more years of Barky. Mittens does not have enough "fire in the belly." He is no Reagan on a white horse. In the next five years (or less) look for gasoline to go as high as $8 in some regions, and gold to approach $3000. According to others, these projections are too generous and optimistic. Our children are going to develop looks at their elders in ways they (elders) have never witnessed, and will wonder if they are actually related anymore...

Blogger JD Curtis October 05, 2012 6:53 PM  

The Dumb One is strong in this one

Anonymous JW October 05, 2012 6:55 PM  

"I'm insulted when I hear that because we have a very professional civil service," Solis said. "I have the highest regard for our professionals that do the calculations at the (Bureau of Labor Statistics). They are trained economists."

Harump, harump.

Anonymous Rantor October 05, 2012 7:19 PM  

@dh,

While the mainstream doesn't want to use Shadowstats numbers, (they are not mine) many people and businesses do, that is why Shadowstats produces them. Williams is paid by major corporations to provide more accurate labor, CPI, and money supply estimates. The companies using this data pay for it because it better enables them to forecast sales and other activities.

Anonymous E. PERLINE October 05, 2012 8:43 PM  

I'm not an economist. I'm a "governor" in a condo that consists of two phases. Each phase is made up of four hundred apartments. We have an ownership vacancy rate of ten percent. This number is barely above fatal. As you can imagine, it impacts our maintenance.

The point is that I haven't seen any surges of fortune amongst my neighbors yet. Hopefully, in this coming election, they will be less inclined to vote Democrat.

Anonymous jack October 05, 2012 8:50 PM  

Limbaugh was talking today about this strange and large 'drop' in unemployment. His take, probably gleaned from someone else, was that for such a large drop in one month reporting the economy would have to be running at something like 4 to 5% rather than the 1.3 or so that it is. He also remembered when Bush 43 had 5.1 % unemployment and the lefties were screaming about how he was killing the economy. What joy we would have today if 5.1%, a true 5.1, could happen.

Yeah, they cooked the numbers. Had to. No surprise. I just hope Ryan and Romney in the upcoming debates jump all over Biden's and Obama's butts about it.

Blogger IM2L844 October 05, 2012 10:35 PM  

I wonder how many post grads returned to pursue a Masters or PhD because they couldn't find work to make payments on their student loans. I'd bet enrollments are up significantly.

Anonymous bw October 05, 2012 11:34 PM  

Job numbers spawn conspiracy theories?

The latest from the AP

Either you believe in the Statist conspiracy theories, or you believe the State itself is the biggest conspiracy - and lying, thieving murderer - ever brokered.

Choose you this day...

Anonymous John Dewey October 05, 2012 11:36 PM  

I wonder how many post grads returned to pursue a Masters or PhD IM2L844


Now, THAT is Pavlovian training for you! We win!

Anonymous Aeoli Pera October 05, 2012 11:59 PM  

We win!

I'll be depositing your present on top of your grave presently. It's custom-made.

Anonymous Aeoli Pera October 06, 2012 12:03 AM  

"Present" was supposed to be "trophy". The subject of public schooling makes me lose my head a little.

But then, a lot of public schoolers end up with dyslogia and anger.

Anonymous Thomas Mann October 06, 2012 12:56 AM  

a lot of public schoolers end up with dyslogia and anger

By Design. We still Win!!

Anonymous Gen. Kong Zarathustra October 06, 2012 1:13 AM  

We have continual great leaps forward from the booming economy under Dear Leader. Thus spake the Ministry of Truth.

Blogger IM2L844 October 06, 2012 1:13 AM  

Yeah, they cooked the numbers. Had to. No surprise.

Apparently, the all important liberal talking point, that it is now exceedingly crucial to vote for Obama in order to save the epitome of everything we hold dear (Big Bird), was wearing a little thin.

Anonymous zen0 October 06, 2012 1:33 AM  

I wonder how many of these jobs went to recent immigrants?

I wonder how many part time jobs went to out of work young people for the election campaign efforts of the republicrats and democans?

Remember the temporary bump census workers provided?

Anonymous zen0 October 06, 2012 2:16 AM  

They are trained economists.

Monkeys can also be trained. You want a banana, you do the dance.

Anonymous bw October 06, 2012 2:35 AM  

Monkeys can also be trained. You want a banana..

Fu*&ing Raciss!!

Anonymous zen0 October 06, 2012 2:39 AM  

Thanks, bee-dubya, the vehemence was a nice touch and is much appreciated.

Anonymous DonReynolds October 06, 2012 12:23 PM  

Solis is a black woman whose own continued employment as cabinet secretary is entirely dependent on who wins the election in a month. Could she and would she lie about the employment picture to boost the likelihood of her boss getting re-elected? Yes, of course.

Do we have ANY REASON WHATSOEVER from other sources of information to believe that this past month included a record-busting increase in employment, not matched in the past 29 YEARS? No...there is no such supporting information.

I need no smoking gun, video tape, email, witness of any other kind, or deathbed confession. Solis is a friggin liar. There has been no such dramatic increase in employment and yes, this was politically motivated.

Blogger James Higham October 06, 2012 12:53 PM  

Like it very much. Just been fighting over such things over our way.

Anonymous Tom B October 06, 2012 6:17 PM  

Thanks VD, I now have the Bangles running around in my head singing THIS title, instead of the actual song (which would have been bad enough...)

Anonymous JI October 07, 2012 11:21 PM  

How could the household survey increase by 873,000 jobs while the employers survey increased by 114k? Has there ever been such disparity between these two monthly surveys?

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