In an article at The Atlantic on how bad jobs data is driving our lousy economic policy, Matthew O’Brien notes:
Just how bad are the data? Well, keep in mind that the jobs report’s margin of error is supposed to be about 90,000. But these post-crisis seasonal errors have almost doubled it to about 170,000. That’s right: the jobs report’s real margin of error has been about as big as the average jobs report itself the past few years. Now, the one bit of good news here is this effect has already faded away for the most part. Remember, the BLS only looks back at the past 3 years of data when it comes up with its seasonal adjustments — so the Lehman panic has fallen out of the sample.
and that’s not even taking the obviously flawed “birth-death” factor into account. In addition to the way the Mr. O’Brien points out that the jobs numbers are “cooked”, they’re also cooked based on the rate at which businesses enter and leave business. But businesses are now being formed at a rate significantly below historic levels (even historic levels during economic downturns).
He concludes:
The BLS can, and should, do better.
Do they have incentives to do better?
His specific example is one they should have avoided. They can probably do better if we want to spend more money. I would probably leave it alone. As long as they are consistent in their methods and reasonably transparent, it is still useful data especially as a trending tool.
Steve
I have a hard time reading any post that says, “data is.” Sorry.
Economists………… I was going to off with a four letter word littered rant.
How about we deal with it from the perspective of employers.
Unemployment is a mess, its understated, its going nowhere under current government policy. Those who advocate current policy have blood on their hands. They deny it. Those of us trying to swim like salmon up current can’t believe the idiocy of those who like current government policy.
Its a damned shame.
Blind ideology triumphing over reality………and the very folks the blind ideologists profess to want to help. At the end of the day it becomes an empirical matter. Empirically, unemployment and underemployment is sky high, especially when data is sliced to certain demos.
This is so bad, you can’t make this shit up.