A couple weeks ago, this column analyzed the inflation rate reported by the Bureau of Labor Statistics (BLS), and concluded that you should rely on your common sense when the government reports questionable statistics. If they don’t make sense based on what you see, experience, and hear from your friends, then they’re probably wrong. Last week’s unemployment number – which decreased to a still-dismal 7.8% – should not only make no sense to you, but should have never made sense to the BLS and therefore should never have been issued.
So am I just popping off or is there a factual basis for this claim? Statistical analysis has to pass a smell test, and the BLS should have known that what they presented did not. Their own web site states that “The unemployment rate declined by 0.3% to 7.8% in September. For the first 8 months of the year, the rate held within a narrow range of 8.1% to 8.3%.” Nowhere is there any explanation of why this anomaly occurred.
You, sitting at home without a degree in statistical analysis, look at the statement from the BLS and scratch your head. Did something happen in the last month that radically changed our economy? If there were only 114,000 new jobs reported, how did 873,000 more people report being employed? If you were running the BLS, you would likely tell the people who brought you this nonsense to go back and check their figures. Or you might ask: if this is correct, have the numbers been wrong for the past year?
Then you would start to search for correlating information. Let’s see, the average work week increased by 0.1 hours. Yes, that’s six minutes – not exactly steamrolling. Then you would see that the underemployment rate remained steady at 14.7%, and you would recall that just a week ago, the anemic economic growth of 1.7% for the second quarter was revised even lower to an abysmal 1.3%. You might ponder the whole matter, take a break, drive to lunch, see that gas prices are astronomical, and come to the conclusion that this unemployment number is just nuts.