Friday, July 08, 2005

Economics Statistics Through the Looking Glass

Don't you just love it when the lowest unemployment figure in four years comes out, and the MSM (Mainstream Media, e.g. Reuters via the Washington Post, 7/8/05) headlines their report "Job Growth Tepid, Jobless Rate Drops"? Let's see, is that drop positive or negative?



I don't think we should necessarily give way to any primeval urges towards irrational exuberance or anything, but so what if job growth is tepid? This is still the most people who have worked since 2001.

And it's not the only example of manipulation in this article. Look at this sentence:

"...[T]he unemployment rate fell to its lowest point since September 2001 as few people joined the labor force" -

...(?) Now let me think a second; is that supposed to be good news or bad?

"June's tepid employment growth came in below analyst expectations ... but the decline in the unemployment rate ... was a nice surprise, since Wall Street had expected it to hold at 5.1 percent. The drop was mostly due to a paltry 1,000 increase in the work force ..."

Hmm. "Tepid" employment growth. And only a "paltry" 1,000. Even the all-knowing analysts didn't expect the situation to be this bad. I guess we're really in for trouble.

It goes on to enumerate the sectors where some of the increases have come; but then it finds another "sign of underlying weakness" in the unchanged workweeks. "Employers typically increase the length of the workweek before taking on new workers, so a lack of growth in that area can mean scant hiring ahead." (Oh dear, not good.)

"Factory payrolls shrank for the fourth straight month as auto assembly and parts plants cut back on production." (That does in fact sound depressing.) "A glut of inventories has prompted ... slow production .. [and] jobs have been lost ..." (Not very optimistic either, that.)

Now, the fact of the matter is that even some sound statistics crunchers are predicting that the business cycle expansion may be nearing the top of its Ferris wheel (see the June 2005 edition of one report here), but the Post doesn't really care what the problem is. They just want to degrade the President's policy of tax cuts in order to get his Party out of the White House and the legislature.

So what do I think might be the real cause of a cyclical downturn at this point? I think it's the government's mishandling of the taxpayers' money, through their poor spending habits, their meddling with commerce and interest rates, and their subsidizing of excessive purchasing media. All together, these fiscal and political crimes create an imbalanced and unsustainable facade of expansion of the economy.

For more on these topics, see my published articles listed in the right margin; also, see archives, most particularly here.

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