http://video.cnbc.com/gallery/?video=3000071275
CNBC agrees. The numbers are fudged. Now please tell me CNBC is in the GOP's pocket too.
The hilarity continues!
Nothing in that link shows that "numbers are fudged." The reporting is the same and the methodologies used are the same. Folks can disagree on the meaning of the numbers, but nothing indicates that the numbers are not the current best estimates calculated using longstanding accepted methodologies.
No one has ever said anyone was in the GOP's pocket. So, I don't know where that came from. That said, if you want to talk about potential biases, the CNBC report you linked was from Rick Santelli (who is widely credited as one of the catalysts for the formation of the Tea Party). While I am not sure that always makes him a GOP shill, it certainly suggests a potential anti-Democrat position or worldview. However, I am not nearly interested in the biases ; I am interested in the fact that Santelli apparently does not understand what the population adjustment means and how it is accounted for by the Bureau of Labor Statistics.
Here's what Santelli said in the linked video:
"What we got looked like a good report. I said, 'Let's get the calculator out,' and I did. And so did a boatload of my sources and big blogs that many people read like
Zero Hedge. The labor force participation rate, if you look at non-seasonally adjusted, a fresh low going back to April of '83. If you look at seasonally adjusted, a fresh low participation rate going back to December of '81. What does that mean in English? Shrinkage. Shrinkage. 1.2 million people are now not considered unemployed anymore. They just have left the system. So, we need to concentrate on the internals, and eventually we want to watch the fixed income market to see if some of this sets in as people do their ciphering.
Listen, when you look at the body counts on the establishment survey, we created jobs. That's a good thing. There's my perk. But I'm sorry, if you look at the other side, you look at the household survey, yes, we had this big seasonal adjustment. You can go to the BLS, you can see their economic release, you can see their situation summary. And we can see that 'not in labor force' moved from about 86.6 million to 87.8. There's your 1.2 million.
And we do see the asterisk, there's been an adjustment on population. That's the way it goes. We make an adjustment. The last 12 months needed to be adjusted. It is what it is."
Wow, pretty damning stuff. Except it is dead wrong. It seems to arise from a failure to understand that the population adjustment comes, as it must, when it is reported. They can't go back and apportion or pro-rate the data, because no one knows when there were increases overtime. The Census is not ongoing, it is an an every ten year event. It also fails to realize that stripping out the supposed source of the "jiggering," this population adjustment, and calculating the numbers would give you a zero change in participation rate. So, Santelli was flat wrong.
Let's get back to biases for a minute. The American Spectator (if you don't know, a conservative magazine, which should be commended on having the intellectual honesty to debunk Santelli's and ZeroHedge's misstatements) has this to say about the Zero Hedge reporting on this (non)issue:
"It is all the rage among conservatives, libertarians, and others who, like me, fear and loathe the Obama administration to point out the labor participation rate and suggest that the numbers are being manipulated to the advantage of Barack Obama and that labor statistics are barely-concealed "propaganda."
One of the leaders of this wave -- and a guy who I think is generally quite a good analyst -- is Tyler Durden who writes over at ZeroHedge.com. A perfect example is here.
I have some sympathy to this argument, but I think it's getting much more traction than it deserves, as you can see in the comments to Aaron's note and my note about the employment numbers.
But even someone who digs into the numbers as much and as well as Durden does can sometimes miss something important.
In particular, Durden says that the civilian non-institutional population rose by 1.7 million month-over-month but doesn't mention that almost all of that increase was due to an adjustment by Bureau of Labor Statistics based on the results of the 2010 census, plus smaller annual adjustments.
From the BLS report:
The adjustment increased the estimated size of the civilian noninstitutional population in December by 1,510,000, the civilian labor force by 258,000, employment by 216,000, unemployment by 42,000, and persons not in the labor force by 1,252,000. Although the total unemployment rate was unaffected, the labor force participation rate and the employment-population ratio were each reduced by 0.3 percentage point. This was because the population increase was primarily among persons 55 and older and, to a lesser degree, persons 16 to 24 years of age. Both these age groups have lower levels of labor force participation than the general population.
In other words, the participation rate (employment-population ratio) was reported to have dropped by 0.3%, exactly the amount of participation rate "drop" created by changing the population number used in the calculation (due to updated census data.) Without this once-a-decade adjustment, the change in participation rate would have been reported as...wait for it...zero.
I don't want to overstate the significance of Durden's oversight, which conservative voices around the media and the web are also making, namely the idea that the participation rate dropped 0.3 percent and the labor force dropped more than 1.2 million in the past month. Those things are simply not true no matter how loudly people scream "conspiracy" and "propaganda." (Having been trading financial markets for about 25 years, I've heard these same accusations about economic data being manipulated to help the incumbent president -- whether Democrat or Republican -- so many times, they just bore me now.)
And while the actual participation rate might in fact be this new lower number, that would also mean that prior numbers were lower. In other words, the top-line change -- caused almost entirely by using new census population numbers -- is an artifact of the new census data, but few people have read to the end of the BLS report to get that important piece of information.
Furthermore, there are cyclical reasons that the participation rate shouldn't be as high now as it was a few years ago in a different part of the economic cycle, as economist Brian Wesbury (no liberal, he) explains.
Look, I don't like writing anything that is likely to benefit Barack Obama or his supporters. But the facts are the facts, and the claims of a big one-month drop in labor force and participation rate are simply wrong. If our side is going to call certain data "propaganda," the least we can do is make sure we understand the data."
http://spectator.org/update/2012/02/03/participation-rate-issue-less
So, to summarize, no numbers were fudged and Santelli was dead wrong about "shrinkage" and the participation rate. No fudging, no propaganda, and a good jobs report. As the man said, facts are facts.