“Job” count is always wrong

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The 2004 edition of the President’s Economic Report included creative suggestions that statistical agencies hoped to reclassify fast food cooks as manufacturing workers.

“When Fast Food Restaurants Sell Hamburgers,” the report states, “Do they offer a ‘service’ or do they ‘manufacture’ the product by combining inputs? “I asked.

I hear you snicking, but it made some fair points.

The report stated, for example, that “producing soft drinks with water and concentrates is classified as manufacturing,” so why shouldn’t we assemble hamburgers?

The answer lies in the Census Bureau’s definition of manufacturing. This counters the BLS duties that “the mechanical, physical or chemical transformation of materials, materials or components will be converted into new products.”

Heating the patties on a frozen burger actually results in a “chemical conversion.” The heat unfolds the protein in the burger and reconstitates it in a way that irreversibly alters it.

(You can freeze and dissolve soda as many times as you like and still drink it, but you’ll regret trying it with a burger.)

However, it’s surprising to claim that heating the burger will turn it into a “new product,” so it’s not surprising that BLS has continued to classify burger flippers as service workers.

If BLS rejected the White House proposal on its merits, everyone else rejected it on that politics. This is a transparent attempt by the White House to make the manufacturing sector look healthier.

It was not the first time that the process of counting seemingly mundane tasks has become a political flashpoint.

In 1971, the Nixon White House closed the BLS press conference after the agency had not found a 0.2% decline in unemployment rate “slightly important” (the Secretary of Labor described the same data as “very important”).

A month later, statistical errors exaggerated the further decline in unemployment. This time, it raised the fear that the White House is manipulating data to make the economy look better.

The investigation found no evidence of political impact on employment data, but still, OMB responded by issuing an order that severely restricted early access to political appointees’ data.

Even more surprising, there were accusations that the White House had manipulated employment data to show the economy. bad More than before.

In 1961, Reader’s Digest published an article accusing Kennedy White House of “expansion” as an excuse for government spending and regulation by using data techniques to “expansion the unemployment issue.”

Again, the investigation found no basis for the claim.

A similar 1944 survey dismissed a similar claim that the BLS “successfully acquiesced” the White House request to underestimate inflation.

All of these unfortunate episodes are detailed on the BLS website. This underscores how precedent there is behind President Trump’s new accusations of political bias in nonpartisan institutions.

In fact, his shocking decision to fire Erika McEntarfer wasn’t the first time a BLS commissioner has lost his job for political reasons.

In 1932, Ethelbert Stewart “retired unwillingly” as head of the BLS after publicly opposing the rosy portrayal of the Hoover administration of the labor market during the depression era.

In response, San Francisco News “In a city named after George Washington, they seem to fire people to tell the truth,” he said.

Now, in contrast, McEntarfer is do not have Talking the truth: Statistics.

On Friday, President Trump accused the BLS commissioner of “miscalculations.”

but every Jobs reports are miscalculations by design.

When BLS reported on Friday that the US economy added 73,000 jobs in July, Mcentafer and everyone involved in that number knew it was wrong.

As with each month, the July report was based on incomplete data. BLS is not waiting for 121,000 surveyed employers to respond.

Instead, it matches what you have at the end of the month (usually only around 60% of what you have), then update that model with additional responses subsequently trickle.

but, all The data are mere estimates based on many assumptions.

For example, without adjusting for seasonality, the BLS would have reported that the US economy lost 1,066,000 jobs in July.

The difference between the number of jobs created in July and the 1,066,000 and 73,000 that everyone thinks is just one measure of how BLS’s model is “wrong.”

“All models are wrong,” as statistician George Box famously said, “But some are useful.”

The BLS model, which comes up with monthly work counts, is one of the useful things. It’s an early warning system that will enable businesses, investors and the Federal Reserve to adapt. direction of the job market.

As the president is sure to know, the true size of the job market is unknown until everyone reports taxes in a year or so.

However, the president also appears to be keenly aware of the power of numbers that influence perceptions of reality.

For example, hamburgers have more calorie counts. It’s protein, night out with friends, and culture.

But the moment you read “1,600 calories” on the menu, the bacon cheeseburger becomes something completely different: judgement. responsibility. Guilt.

Often, numbers wield more power than the reality they are trying to express, so of course make sure they’re right.