The process of collecting and analyzing economic data is occasionally the subject of criticism - and now we have commentator Bruce Krasting taking aim at the mostly positive January employment report. Former Reagan budget director David Stockman, who seconds Krasting's position, writes in an email, "If you spend a little time with these numbers you will know that they are being made up." Via Business Insider:
All of these mainstream economists treat the BLS and BEA data like it's holy writ--when it's evident that the reports are so massaged, estimated, deemed, revised, re-bench marked and seasonally adjusted that any month-to-month change has a decent chance of being noise. What deep secret might they be hiding?
The mainstream narrative never gets to the trend. In this case, the plain fact is that we are warehousing a larger and larger population of adults who are one way or another living off transfer payments, relatives, sub-prime credit, and the black market. My suspicion is that this negative trend and many others like it get buried by the monthly change chatter from mainstream economists and on bubble vision, and that these monthly deltas are so heavily manipulated as to be almost a made-up reality. Call it the economists' Truman Show.
Stockman's criticism might well be valid, but if the numbers are suspect now, they've certainly been suspect for many years and administrations. In other words, don't take aim at a specific set of figures that provide support to the guy you want to see lose in November.
Federal Reserve Chairman Ben S. Bernanke said the 8.3 percent rate of unemployment in January understates weakness in the U.S. labor market. "It is very important to look not just at the unemployment rate, which reflects only people who are actively seeking work," Bernanke said today in response to questions at a hearing before the Senate Budget Committee in Washington. "There are also a lot of people who are either out of the labor force because they don't think they can find work" or in part- time jobs.