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Massachusetts Liberal

Observations on politics, the media and life in Massachusetts and beyond from the left side of the road.

Saturday, May 05, 2012

Revisionist history

It's a monthly journalistic ritual, tracking the jobs and unemployment rate, one politicians love to use to make headlines. But the methodology behind that data should make any good reporter sit up and ask tougher questions.

True to form, Mitt Romney blasted April data that showed the 115,000 jobs created came up short of what the fortune tellers predicted for the month. Lost in the headlines, as they are every month, is how many actual jobs were created the month before, a number that has been consistently low-balled in its initial report.

Revised numbers showed there were 53,000 more jobs created than originally reported, not predicted.
... both March and April job figures were revised higher, by a total of 53,000 jobs. Had there been no revisions to past months, the report for May would have shown a gain of 168,000 jobs, a bit better than the consensus forecast. Instead, the reported rise is 115,000, which is the lowest gain since October.
 That reality led respected New York Times financial reporter Floyd Norris to note:
The revisions have been consistently positive in recent months, and that in itself is a sign of relative economic strength.
Norris also pulls the curtain back on how thew data are collected:
The source of the revisions is late responses by companies to the Labor Department survey. The department at first estimates numbers for the missing companies, and it appears those early estimates have been too low.
This on top of the less than scientific way the data are collected in the first place: rather than sift through new jobless claims and new hires, the Census Bureau conducts a random survey of 60,000 households to determine the jobless rate. It says the survey is more accurate sample than political polling, but you get the idea.

In essence, the government conducts revisionist history every month, taking guesstimates on who is working and which companies are hiring or firing.

Jobs and unemployment are indeed important benchmarks of an economy and political stewardship. And the most important fact that should be taken away is that employment has returned to the level Barack Obama inherited from George Bush, despite the massive loss of state, local and federal government jobs that have offset private sector growth.

The monthly numbers? Great political theater but just like political polls, a somewhat accurate snapshot in time that barely scratches the complexities involved.

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Stuart Wilson

May 07, 2012 11:36 AM  

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