Caroline Baum takes a look at the many widely varying interpretations of last week’s labor report in this commentary at Bloomberg, breaking those interpretations down into just a few groups – Democrats, Republicans, and conspiracy theorists, reserving the harshest criticism for the black helicopter crowd.
At the far end of the politicization spectrum are those who believe the government cooks up the numbers in some dark corner of the Labor Department basement. It’s as if these folks decreed, “There shalt be no good news as long as Obama is president, the federal government is expanding and the Federal Reserve is printing money and debasing the dollar.”
I have a message for them. It’s not the data that are politicized. It’s the interpretation.
Friday’s report inspired an outpouring of accusations of “fraudulent employment statistics” and long screeds on updated population estimates from bloggers (ZeroHedge and the Economic Collapse) and editorial writers (the Washington Times) alike.
The household survey for January incorporated new information from Census 2010. Previous months were unrevised. Simply put, there is a December/January break in all the series that rely on the new estimates.
If the December data had been updated for the population- control effect, the civilian non-institutional population would have increased 175,000 in January, a typical month-to-month change, not the 1.7 million without the adjustment.
The composition of the population changed, as well. Conspiracy theorists seized on the 1.2 million increase in those “not in the labor force.” Adjusted for an apples-to-apples comparison, the number fell by 75,000 in January. That’s because the population increase was concentrated in persons 55 and over and in the 16-24 year-old age bracket: a population less likely to be in the labor force than the general population. (Tables B and C on Page 7 of the Employment Report outline these effects.)
My impression has always been that the conspiracy theorists are somewhat apolitical – or at least apolitical when compared to the many political types that only dabble in economics and finance. Of course, I could be wrong.