Theory of cooked jobs data makes no sense
Rigging the unemployment rate is a lot harder than you might think.
Attention conspiracy theorists who hate Barack Obama with passion and members of the tinfoil hat brigade: the president didn't manipulate the unemployment data for his political advantage.
Yes, I know that's what former General Electric (GE) CEO Jack Welch said an a Tweet that's gone viral (See Bloomberg's coverage) but he's dead wrong.
Here are my reasons why:
First, the planning -- Such a conspiracy would have to been hatched at the highest levels of the government and would have made Watergate look like a third rate burglary.
It would need to involve at least the Secretary of Labor, the Secretary of Treasury, the head of the Bureau of Labor Statistics (BLS), members of the White House staff along with scads of civil servants. These are people who can't agree on what to order for lunch let alone do something as complex as market manipulation. Even if they did agree to commit a felony, odds are the scheme would be leaked to the press because publicity can be as addicting as heroin to some public officials.
Then there's the practicality -- The conspirators couldn't just hack into the BLS's computer network and change the unemployment rate figure on a press release. Now, that would be too easy. Unemployment is calculated through huge surveys covering 141,000 businesses and 60,000 homes. Schemers would need to manipulate many data sets to get their desired results. But how would they know which ones to change and how far to change them without arousing suspicion? These numbers are often revised, which would complicate the process further and wouldn't the people who collect the data notice?
And another thing -- If this data was faked, the schemers were not ambitious. Though the 7.8% jobless rate was better than expected, the gain of 114,000 jobs in September on a seasonally adjusted basis came in below forecasts. The jobs gains is nothing special and economists are wondering if gains seen in areas such as education are sustainable.
The sad aspect about "Neutron Jack's" claims is that there is some basis for them. Some countries such as Greece routinely fudged economic data for years so that they would appear more financially stable. Many suspect China may be doing the same thing as investors grow worried in about a slowdown in the most populous country. There is no evidence anything of the sort has happened in the U.S., although some experts including MSN Money's Anthony Mirhaydari have found some anomalies in the data. But that happens all the time, which is why the numbers are revised. It is not the sign of a conspiracy.
Jonathan Berr does not own shares of the listed stocks. Foliow Jonathan Berr on Twitter@jdberr.
| Tags: | economyGEJonathan Berr |
The Household Survey and Payroll Surveys come from two very different population samples. During normal times, the results of the two tend to converge (come together). What is surprising about this month's is the wide divergence in numbers - the Household of 873,000 and the Payroll of 114,000!
BTW, the UE rate is determine from the Household. In any case, these numbers can be very volatile from month-to-month! If I was Obama, thnk God I'm not, I wouldn't hang my hat on this data.
What I find interesting is if you use the number from these three groups:
1. Those who want a job but aren't looking
2. Those who only have part-time work
3. Those who want a job and ARE looking
You get nearly 15% which is terrible!
On CNBC this am they said that if Romney get elected the USA will see "worst austerity programs" over his 4yr term than Europe, not growth as he claims. THEY SAID HIS PLANS WILL SLOW THINGS DOWN. If Obama gets elected, if Congress says "No" again to infrastructure projects like FDR had to build the economy, then he will sign an exec order to get jobs. They think he will deal with the 'No' Congress as his first agenda. Congress won't be able to sweep it under the rug any more.
PS: Did you see the Romney 47% FLIP FLOP this am, now he says he was 'WRONG' to say that the 47% are victims vs just plain ignorant. Romney key skill, FLIP FLOP !!!
Did I mention anything about Jack Welch, being an old fool...And a tool for the GOP. ??
Numbers get revised, because the BLS is a not 3-4 day, job in a month...
I believe they research constantly, trying to get the numbers or statistics correct..
It's their only job and they strive to get it right.
Questioning them is like not trusting the CDC...Sometimes,someplaces you have to have confidence in certain Government agencies... All of them are not out trying to get us..
And many are dedicated to doing the best job they can.
Jonathan
Frankly I grow weary of all you left wing, Obama loving, suburban, bleeding heart, MSN, peckerheads propaganda. Nixon lied, in my eyes Obama has lied so much he makes Nixon look like a Saint.
Watergate was a third rate break in! ....but much of what Obama has done has been worse than third rate and I'm not going to list it all, becasue all the left wing peckerheads won't believe it anyway.
The Bureau of Labor Statistics is just another Federal Agency and will follow what ever the leader says. The GS-15s that run BLS did not get to be GS-15 by fighting with Politicial bosses. They got to be GS-15 by sucking up really well And all the little GS- 12 will follow along becasue they know what happens to whistleblowers and they have a familiy to feed. Should they not follow the bosses instructions, they will find themselves transferred to some dark corner in a basement somewhere or transferred to the frontline of Border Patrol. "Yes Sir what number do you want the Unemployment to be?".
Bloomberg? Just another far left rag!
And me, I'm just a middle of the road kind of guy. Some subjects a bit right and some subjects a bit left but overall middle of the road.
who is he kidding.? hes past his prime, and just another mouthpiece for corporate america!! you almost were waiting for nurse ratchett to show up and take him to his room.! this guy is disengenuis at best, and would use his name to shill anything that would put money in his pocket, and damn our nation! HE IS MITT ROMNEY!!!!!!!!!!!!!!!!!
Last night on Anderson Cooper, Jack sounded like an idiot. No wonder, the Jack Welch Management Institute is part of the for-profit Strayer University instead of a highly reputable university.
While some think that the way that the Federal government determines the unemployment rate is flawed, can you imagine the outcry if the methodology were changed just before an election? Besides that, what value would the data provide since there would be no way to compare month-to-month changes unless you revised data for the past 10 years to reflect the "improved methodology." Kinda what happens when corporations change their accounting methods.
If anyone has any experience at all with Chicago politics you would not over look anything.
Just a thought:
So by adding 114,000 jobs the unemployment rate drops .3 %? Ol' Leroy claims to have added 5 million jobs to date.
Using his numbers not mine, by the .3% multiplied by 114,000 equals approx 1%?, He has decreased unemployment by 14-15%? The numbers don't add up. Something smells rotten.
Welch is just an old dottering fool....That's way past his time in the spotlight..
Some of them, need the attention....Because they have nothing else left..
I know, because I play Golf every Thursday....With some old fools like him.
We either talk about past glorys......OR.....Whine and complain about our maladies.
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