I just posted at comment at Marketplace.org in response to an article written earlier this year regarding data rigging. The conclusion of the article was that data are noisy, but rigging is not the issue. This, of course is all relevant given the Tweeter, Jack Welch‘s comment accusing the “Chicago boys” of manipulating the data. As Joe Nocera points out in his column today, the last accusation of employment data manipulation was by Richard Nixon of the BLS under his own administration when the numbers were more negative than he would have liked. I am not surprised that a former corporate CEO, particularly Jack Welch, would have so quickly jumped to a data manipulation accusation. Most public company CEOs are quite used to data massaging at least once a quarter to satisfy the stock market. I guess they must assume that everyone else does the same to meet objectives other than accuracy. Below is the posted comment to the Marketplace article.
If one looks at the history of revisions of economic data ranging from GDP to Labor Stats there is a pretty consistent picture. When the economy is declining the revisions tend to be negative. At turning points the revisions are noisy. And, in improving economies the revisions are usually positive. This is not always the case, but usually. We are in a slowly improving economy. The ADP employment reports which even Jack Welch, the tweeter, wouldn’t accuse of being rigged, have been better than the numbers from the labor department prior to revisions. The labor situation is quite dynamic—4 million people leave jobs and take jobs every month. The difference between those two represents the increase or decrease in jobs “created.” Take a look at http://bit.ly/NXCmxF, to get some more info on this. Whoever is president for the next four years will get credit for the continued improvement unless the crazies in Washington don’t deal with the Fiscal Cliff. I am optimistic.