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Lies, Damn Lies and Statistics & the Friday Employment Report

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BY: Glenn Holderreed  www. quacera.com glenn@quacera.com

“There are three kinds of lies, lies, damn lies and statistics “ a quote attributed by Mark Twain to British Prime Minister Benjamin Disraeli although subsequent research failed to find it in any of Disraeli’s works. So, while the authenticity of the quote is questionable the sense certainly applies to Friday’s Employment Report issued by the Bureau of Labor Statistics, wildly cheered as proof the U.S. economy is enjoying a sustained recovery.

Well, maybe, but there is some controversy; it may not be a lie, or a damn lie, but it certainly is statistics.

Note: according to the “not seasonally adjusted” data in December there were 132,962,000 people receiving some kind of paycheck while in January there were only 130,263,000 on the payroll. Seems a bit bleak, but not so! According to the “seasonally adjusted” data 132,166,000 employed in December jumps to 132,409,000 by the end of January, and increase of 243,000. This is all statistically proper. January layoffs from the holiday season were below normal so the statisticians show that as an employment gain. It wasn’t as bad as usual so it must be better than expected. Of course, there may not have been as many holiday employees added in December so the layoffs would be low, but that will come out in a revision, which no one will see. Statistics! Still, those 243,000 statistical souls are not collecting real paychecks. No matter how you look at it there are approximately 2.7 million fewer individuals receiving wages at the end of January than there were in December. But the statisticians are pleased, Wall Street is elated, and the mainstream media is thrilled; the mythical seasonal soul may not be real but he/she/it is statistically significant. Finding them at the mall, or the auto dealers may be a bit tough as they seem to fit the official definition of “poltergeist.” A poltergeist is a paranormal phenomenon which consists of events alluding to the manifestation of an imperceptible entity. So there we have it: The increase is poltergeist employees, which are also much cheaper than the regular skin and bones type and everyone is happy. Mark Twain may have lied about Disraeli but they both seemed to understand something about the relationship of statistics to reality. http://www.bls.gov/news.release/empsit.t17.htm