The Apologetics

I probably should just collect all of the various forms of apologetics being used to explain yesterday’s tepid unemployment situation report into a single post. The dumbest remark I’ve read is that it’s random. That’s absurd. If it were truly random the unemployment rate would be varying from 0% to 100% in wild swings. It’s not. Consequently, it’s not random. Perhaps they meant chaotic. It isn’t chaotic, either, but it is complicated. “Noisy” is probably a better characterization.

One of the most common explanations I’ve seen, e.g. in The Economist, is that the Bureau of Labor Statistics measurements are being portrayed as more precise than they really are and that a better description of the report is that there’s a 90% confidence level that the number of jobs created in March was between 20,000 and 200,000. That’s correct as far as it goes but I think that explanation has two problems.

First, amazingly, nobody making that argument was making it about the February report when, presumably, they could have said with a 90% confidence level that the number of jobs created in February 2012 was between 120,000 and 280,000.

Which leads us to the other problem. How likely is it that the true February number was at the middle of its expected range (200,000) and the true March number was at the top of its expected range (200,000)? That seems terribly fortuitous to me. Why wasn’t the real February number at the bottom of its expected range (120,000) and the real March number in the middle of its expected range (120,000)? Or any of the other possible pairs of values? And even if that were the case doesn’t it point to growth too slow to bring those who are unemployed back to work?