Update: I have corrected the number of times the unemployment rate has changed 0.30% points since the original post. The count moved from five times to eight times.
__________________________________________
Conspiracy theorists are having a manic attack on the Bureau of Labor Statistics report indicating that unemployment rate has dropped to 7.8% from 8.1%, a 0.30% change. The claim is that it’s just impossible to see that kind of change in such a short period of time.
Well, let’s see. I just downloaded the unemployment rates from January 2009 to September 2012 from the Federal Reserve Bank of St. Louis (FRED). I then created a graph showing the month-to-month change in unemployment rates. Here’s the graph:
It’s clear that month-to-month changes in unemployment rates are somewhat volatile. The interesting part is that I counted the number of times the month-to-month rate change showed an increase equal to or above 0.30% (red numbers in the graph) and the number of times the month-to-month rate change rate decreased by 0.30% or more (green numbers.
Four times the month-to-month change in unemployment rates increased 0.30% or more and four times it decreased by 0.30% or more. That’s a total of eight times the rate has changed by 0.30% points or more since January 2009. Extraordinary? No.
So, the kind of rate change that the conspiracy theorists point to has happened in the past. It’s not abnormal to see change in economic data in the ranges specified in the above graph.
When the changes occurred in the past there was no outrage. No conspiracy theory that the BLS numbers were rigged from Chicago. These claims which are anti-fact, ant-science represent a continuation by some to interpret or question data to suit their ideology.
When will this nonsense stop? There’s a conspiracy that the polls are rigged. Climate science is a conspiracy. The BLS is infiltrated to suit the electoral needs of the President. Conspiracy about voter fraud, when there is none. These anti-fact, anti-science folks are dangerous to a civilized society.
It’s possible the 7.8% unemployment rate is an outlier. That happens with data. But to claim that the unemployment data has been manipulated is outrageous. The BLS is known for its high level of integrity. There are no current political appointees in the Bureau. Too many people have access to the raw data, making it highly unlikely someone could change the data without being caught.
Carl Sagan popularized the phrase, “Extraordinary claims require extraordinary evidence”. Every time you hear a conspiracy theory ask for the evidence!
David Hume wisely advises, “A wise man, therefore, proportions his belief to the evidence.”
The problem wouldn’t be so bad if there weren’t so many indications in the reverse direction. For one the Gallup jobs survey was only at 8.1% and they predicted the BLS would be within .1 percentage points of this. Moreover, so many economists predicted it would be around the same value also.
Then there is the problem with internal consistency. Why is the household survey so wildly divergent from the employer survey? It was given as an explanation that the household survey was also measuring part-time jobs. But a recent report you yourself cited suggests all these new jobs found by the household survey are also full-time.
Bob Clark