Back when I was a kid there was a novelty item you’d occasionally see at fairs or in souvenir stores—a “weather-predicting donkey”. Just a crude cut-out of a donkey, maybe a little paint for expression, and a piece of string attached to the hindquarters as a tail. The thing would be captioned:
Donkey’s tail dry: Sunny
Donkey’s tail wet: Rain
Donkey’s tail frozen: Cold
Donkey’s tail blows off: Tornado
I do not believe that the statistics produced by, for example, the Bureau of Labor Statistics are quite that crude. I do think, however, that there is an exaggerated sense of how precise the figures that they’re producing are. They might be accurate to the hundred thousand. Or maybe just within that order of magnitude.
There’s still no substitute for street smarts. If you know a lot of people who are unemployed or underemployed, there probably aren’t enough jobs in your neck of the woods whatever the aggregate statistics might say. If there are a lot of “For Sale” signs on your block, it’s a fair indicator of a weak housing market, at least where you live.
I no longer believe that the Dow-Jones Industrial Average measures anything in the real economy. I honestly don’t know what it measures any more.