Lies, Damned Lies, and Statistics

Economists have long been disparaged for inaccurate predictions, but Friday's jobs report laid bare a new problem for the world's largest economy: questionable data. https://t.co/Jh97Hbi8nR

— Axios (@axios) June 8, 2020

Highlights from the article:

Driving the news: The government's jobs report on Friday wasn't just much better than expected — showing the U.S. added 2.5 million jobs in May, 10 million more than economists predicted — it was full of inexplicable holes and numbers that contradicted other government readings.

To wit, as DRW Trading rates strategist Lou Brien points out, the Labor Department's unemployment insurance report showed that for the week ending May 16 there were 29,965,415 unemployed people receiving unemployment benefits.

The Labor Department's jobs report — which surveys individuals and businesses during the week of May 16 — found there were 20,985,000 unemployed people.

That would mean there were 9 million more people receiving unemployment benefits than there were unemployed people during the exact same survey week.

Isn't that the "118% registered voters in Los Angeles County" argument the Press Secretary was making recently?

Unsurprisingly, you can't trust the numbers from Texas and Florida:

Between the lines: The Labor Department also noted that only 35 states reported pandemic unemployment assistance numbers and just 22 reported claims for extended benefits during that week.

The extended benefits data was missing from the nation's second and fourth most populous states — Texas and Florida — suggesting the number of unemployed people is likely higher than the unemployment insurance data show, not lower by 9 million.

And then there's the bit we all should be familiar with (Digby wasn't, as of this morning):

There's more: The May nonfarm payrolls report included a “misclassification error” that would have made the unemployment rate "3 percentage points higher" than the reported 13.3%.

That "correction" would mean the employment numbers for May were worse than April, not better.  I'd much rather they be better; but I'd also prefer the numbers reflect reality.  The more they don't, the less they matter.