The process, which is what is important, is beyond reproach

October 22, 2012


Nancy Anderson, MBJ contributing columnist

I am hopping mad!

Jack Welch and others have taken to the air waves suggesting the latest economic data on jobs has been manipulated. They have no evidence, but that hasn’t stopped them from claiming that government information has been “cooked.” Such an accusation reveals an ignorance of the collection and calculation of such data and reveals a “kill the messenger” mindset.

The production of reliable economic data is crucial in policy decision making, but the validity of any data point depends on the process. I always caution my students about accepting that one headline number at face value.

First, it is important to understand that we have two monthly employment reports that survey two different groups. It is the job of the Bureau of Labor and Statistics to collect information and calculate figures on jobs added and the unemployment rate. For September, the unemployment rate fell to 7.8 percent, while we only had 114,000 jobs added during the month. It is not uncommon to see the two reports diverge from one month to the next. Eventually, they will realign. Wall Street gives more weight to the jobs added number.

Second, the final number is the only thing that gets reported in the news. BLS produces a full text report that fleshes out the data and offers a wider view of the situation. Want to read the full report? Go to I call this “looking under the hood,” and it can reveal information that can’t be captured by one bottom line number.

Third, a snapshot number holds little meaning. When it comes to the economy, the trend is everything. Look at the movement over the entire year. Compare it to the previous year’s figure.

Finally, understand that most data is subject to revision — again, a very common occurrence. The revisions for previous months were significant in the positive direction.

Crying foul just because you don’t like the numbers is just being a poor sport, especially when many of the people screaming are the same ones touting the bad news of previous months. Apparently, for some, bad news for America is good news for them. Go figure!

>> Nancy Lottridge Anderson, Ph.D., CFA, is president of New Perspectives Inc. in Ridgeland — (601) 991-3158. She is also an assistant professor of finance at Mississippi College. Her e-mail address is, and her website is

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One Response to “The process, which is what is important, is beyond reproach”

  1. Scott Says:

    Nancy if the jobs numbers are improving so much why did the Fed go ahead with QE3 in Sept.? Didn’t Bernanke make a statement in Sept. that the dismal job market was one of the reasons for implementing QE3? Yes he did! So please tell us why Bernake and the Fed didn’t see those improving jobs numbers coming? I doubt you will. Go back and read Jack Welch’s explanation as to his Twitter tweet on the day those jobs numbers were announced. I doubt you will.

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