Friday, August 3, 2012

Figures lie, and liars figure

A new unemployment number was released today, and, as usual, Matt Drudge nails it:
In addition to the political spin, we have the intricacies of statistics to wade through. The new unemployment rate is 8.3 percent. That's up from 8.2 percent last month. That's the number that gets all the notice and noise. So it's up, and that's bad for Obama, unless the media can spin the heck out of it.

But let's look behind the number. First of all, according to the Labor Department, 163,000 new jobs were created in July. Economists had expected only 100,000 -- so that's good, right? Well, no -- it's going to take a lot more than that to get the unemployment rate down.

And that number of new jobs is completely artificial. The Labor Department always adjusts the number to reflect seasonal issues, such as teachers not teaching in the summer. So ... in reality, the actual number of Americans working dropped by 195,000, with the net job gain resulting primarily from seasonal adjustments. They do that so the number doesn't jump around wildly, like some people I know.

You have to real careful reading the newspaper, if any still exist.

At the top of page one of The Wall Street Journal today we had:
Economy Adds 163,000 Jobs 
U.S. payrolls increased by a seasonally adjusted 163,000 jobs last month, the Labor Department said Friday, but the unemployment rate ticked up one-tenth of a percent to 8.3%.
Then later in the morning it was changed to:
Hiring Climbs but Jobless Rate Ticks Up 
The U.S. economy added more jobs in July than in any month since February, but the unemployment rate ticked up, suggesting the U.S. recovery remains too weak to bring down high unemployment.
See what I mean? Would you take one of those "seasonally adjusted" jobs? I wonder if you get seasonally adjusted coffee breaks.

Some groups in the population are suffering even more. Unemployment for blacks fell from 14.4 percent to 14.1 percent, while the rate for Latinos slid from 11 percent to 10.3 percent. The unemployment rate for teenagers edged higher to 23.8 percent.

And the people I'm always concerned about, because I'm one of them, are those who are underemployed or who have just given up looking. A measure that takes into account those who have stopped looking for jobs as well as those working part-time for economic reasons has hovered well above the headline rate that only counts the unemployed actively looking for jobs. That more encompassing rate edged higher to 15.0 percent.

It's an important number, because if you just give up looking for work, you actually contribute to making the basic unemployment rate look better. 

Go figure.

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