August 4, 2011

Revisions, revisions

Perhaps we weren't paying attention when the unemployment rate was below 6% under President Bush, but there seems to be revision after revision, usually for the worse, and well enough after the fact that to go deliberately unnoticed by the media.  The unemployment rate has, during the Obama administration, been revised upward a number of times following a supposed improvement in the rate.  The next month, with a new rate out, an addendum frequently updates the previous month's rate, typically it's been upward.

GDP was recently revised significantly downward for Q1 2011 to a very anemic 0.4%.  It seems to be standard operating procedure nowadays to put a happy spin on the bad news.  The latest example is a revision of the jobless claim numbers from just a week ago.
WASHINGTON (AP) — The number of Americans seeking unemployment benefits dipped last week, a sign the job market may be improving slowly.  
Weekly applications for unemployment benefits edged down 1,000 to a seasonally adjusted 400,000, the Labor Department said Thursday. That's the lowest level in four months. The previous week's figure was revised upward from 398,000 to 401,000.
That makes 17 straight weeks of initial jobless claims above 400,000. That's not a recovery. That's stagnation in the doldrums. In fact, there's a lot of talk about a double dip recession. I'd argue that despite the standard definition indicating we've left the recession, we really haven't. Firstly, I can't say I trust that there won't be more retroactive adjustments altering the GDP back into a recessionary period. Secondly, if the GDP did jump up, it would have been as a result of that stimulus spending and was of a transitory nature. In other words, the stimulus could have masked a continuing recession for a brief period of time and the effects are now wearing off.

In either case, like a lot of polling nowadays, even economic statistics appear to have taken on political attributes. At a minimum, they are being manipulated for political purposes. With even hard facts becoming subject to manipulation, a clear view of what is happening to the country is becoming more and more difficult to find.

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