Lies, damned lies, and statistics

Note:  this is what my impression was before looking at the Household numbers.

Obama claimed yesterday that the unemployment numbers showed that his economic plans are working.

I suspect that this is wrong because the trend has been different over the course of this "recovery".

All that the unemployment rate measures is the number of people who are looking for jobs and can't find one.  To show how absurd Obama's claim is, consider this hypothetical--- if nobody has a job and nobody is looking for one, the unemployment rate would be zero.

But the hypothetical isn't quite as hypothetical as that--- because that is what is happening to a lesser extent.  For example, if more people enter the workforce than the number who find jobs, it has to mean that nobody is looking for a job.  That's just about what happened---only 100k jobs were created, but over 3 times that number entered the workforce.

If the economy was truly growing and created lots of new jobs, that number should be reversed.  That is more jobs would be created than the number of people available.

The real indicator of the poor state of economic health is the soaring debt numbers and the falling incomes.  But Obama won't cite those numbers.  He has to cite a statistical fluke in order to claim success.

Now that I've covered my initial impression, let's look at what I usually look at when I discuss the employment situation--- the Household data.

873,000 more working last month!  This is a great number, but is probably a fluke, not a trend.

If you were to get this kind of numbers for several months running, it would be great news.  Bring out the champagne and pop the corks time.  But, hold the champagne.  Happy days are not here again.  The other numbers aren't so rosy. Those numbers aren't evident here, but in the main report.

For example, incomes aren't rising much, hours worked aren't rising much.