Saturday, February 6, 2010

Lies, Damned Lies, and Statistics

"Oh, people can come up with statistics to prove anything. 14% of people know that."
-Homer Simpson

The latest US non-farm payroll report was all over the place. It's like they have a bunch of monkeys throwing shit at a dartboard, and whatever sticks is the number they come up with. The headline number was that unemployment dropped to 9.7%, even though there were 20K job losses.

The revisions are the ridiculous part though:
The figure for November was revised higher, however, to show a gain of 64,000 jobs. That was initially reported as a gain of 4,000.
Well, you were only off by a factor of 16. Seriously...why bother reporting the initial numbers when the "revisions" are orders of magnitude larger ? Wouldn't it be simpler just to say "We don't know, it's a complete guess"? Or at least clarify your initial statement, "We think that the economy added about 4 thousand jobs, give or take a few million or so."

I also find it amusing that the G&M reported only the November upwards revision, "Good news, yay...people are happy!", without mentioning that December was revised downwards nearly double the intial estimate, from 85K job losses to 150K.

All in all, revisions between Nov. (+60K) and December (-65K) resulted in a net loss of 5000 jobs.

Here's the scary part though...
The department also revised its past employment estimates to show that job losses from the Great Recession have been much worse than previously stated. The economy has shed 8.4 million jobs since the downturn began in December, 2007, up from a previous figure of 7.2 million.
You "missed" 1.2 MILLION jobs somewhere? Whoops. You can bet your ass that if the revision was the other way and they had overblown the recession and "found" an extra 1.2M jobs, this would have been a headline, instead of a throw away comment buried in the middle of the article.

On a more amusing note:
The federal government has begun hiring workers to perform the 2010 census, which added 9,000 jobs. That process could add as many as 1.2 million jobs this year, though they will all be temporary.
Clearly they need all the help they can get based on the "numbers" they've been releasing lately. Here's a start, maybe you should start hiring people who can count. Hell, I'm sure there's plenty of unemployed Americans with stats degrees that would be thrilled to show your current crack team of monkeys how.

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