Saturday 6 October 2012

Gambling on the unemployment conspiracy


The US unemployment rate has dropped below 8% for the first time since 2009. Some suspect a conspiracy to artificially massage this number down prior to the presidential election next month. If you believe it, you're going to see spooks in all sorts of corners. In any case, people don't vote on the basis of a statistic they see on TV, rather it's whether they are feeling good about themselves and the economy. The monthly payrolls data is a mine of information and a spider's web of confusion. For one thing, prior-month data is often revised a lot - in this case another 80k plus jobs were reported for July and August. For another, there are two surveys, covering companies and households. The latter is smaller and far more volatile and the main reason for the decline in the unemployment rate last month. It showed an 873k spike in jobs compared with a 368k dip in August. You can't do much with data like that unless you smooth it (say a 6-month moving average) and even then it's iffy. Anyway the underlying tone of the data wasn't too bad with the employment-population rate for the key 25-54 year old group pushing up to a post-recession high. Also the drag from public sector job cuts appears to have ceased. None of this will tip the balance for Obama on its own. Gamblers' paradise Nevada has the highest unemployment rate of the 50 states by some distance (12.1%) - a boom-bust economy if there ever was one. The QSL is from KROW in Reno, Nevada heard in San Francisco in 1993 on a business trip. The chief engineer, Martin Stabbert, points out in his very nice letter that the beam was to the west so never to be heard from South Africa.

No comments: