CBS Says White House Is Fudging Stimulus Jobs Numbers

[I AM NOT THAT GUY 5,715]

When Katie Couric and the folks at CBS start doubting what the Administration says about how effective February's economic stimulus package was, you know President Obama is in trouble:

[Sofiyya 1,687]

The AP has been ragging on Barry, too, lately. Even CNN is letting go of its ankles and speak up. But then, they're not really news outlets, ya know.

Edited October 30, 2009 by Sofiyya

[almaty 19]

right, like Fox is

[Trumplestiltskin 5,791]

Fudging job stats to make government policies appear more effective than they really are? I can honestly say that I have never heard of this happening before (gasps)

[I AM NOT THAT GUY 5,715]

Fudging job stats to make government policies appear more effective than they really are? I can honestly say that I have never heard of this happening before (gasps)

He set himself up like no other, when he came up with, "Jobs created or saved." But then, he was young and naive a mere 10 months ago.

Edited October 31, 2009 by Lone Ranger

[Mr. Big Dog 10,747]

Well, the Obama administration could have fixed the official unemployment numbers by opposing the extension of unemployment benefits. Such a move would mean that fewer claims are filed, you know? So, by doing the right thing and extending benefits, the administration really shot itself in the foot. But it did the right thing under the economic circumstances regardless of the backlash it would create.

[I AM NOT THAT GUY 5,715]

Well, the Obama administration could have fixed the official unemployment numbers by opposing the extension of unemployment benefits. Such a move would mean that fewer claims are filed, you know? So, by doing the right thing and extending benefits, the administration really shot itself in the foot. But it did the right thing under the economic circumstances regardless of the backlash it would create.

New claims is the number they use, not continuing claims. A bit of a non-sequitor there.

Back to topic at hand: The administration offers the scrubbed number of 650,000 jobs saved, or created, while Biden is still claiming over a million new jobs created. The Whitehouse needs to sit down all its spokespeople, and settle on some numbers that will withstand scrutinity.

Edited October 31, 2009 by Lone Ranger

[Mr. Big Dog 10,747]

Well, the Obama administration could have fixed the official unemployment numbers by opposing the extension of unemployment benefits. Such a move would mean that fewer claims are filed, you know? So, by doing the right thing and extending benefits, the administration really shot itself in the foot. But it did the right thing under the economic circumstances regardless of the backlash it would create.

New claims is the number they use, not continuing claims. A bit of a non-sequitor there.

You can't derive the unemployment rate merely from new claims filed. Once businesses stop laying workers off, your unemployment rate would go to zero. That's not how it works.

[I AM NOT THAT GUY 5,715]

Well, the Obama administration could have fixed the official unemployment numbers by opposing the extension of unemployment benefits. Such a move would mean that fewer claims are filed, you know? So, by doing the right thing and extending benefits, the administration really shot itself in the foot. But it did the right thing under the economic circumstances regardless of the backlash it would create.

New claims is the number they use, not continuing claims. A bit of a non-sequitor there.

You can't derive the unemployment rate merely from new claims filed. Once businesses stop laying workers off, your unemployment rate would go to zero. That's not how it works.

You are correct after a fashion: A Republican president, I can't remember whether it was Reagan or not, decided a way to artificially lower the unemployment numbers was to exclude those folks no longer recieving benefits fron the unemployment rolls. They look at the number of new claims added in a week to the total number of claims from the previous week, less the number of folks dropped from the rolls that week, to determine the "official" unemployment number.

I was referring to what the industry (and investors) uses as a number to determine whether the work force in increasing, or decreasing, without all the fudge factors, and that is the number of new claims filed.

The DOL does poll employers to determine the number of folks working, and their expected hires in the next period. They compare that to the working age population to determine the real unemployment number, about 17%.

[scandal 951]

The Newshour had a full discussion of the significance of the numbers, particularly the 650000 figure.

Judy Woodruff interviewed Mark Zandi (a noted economist who generally backs the stimulus plan) and Chris Edwards (a Cata Institute economist). Here's the excerpt where they talked about the numbers.

(By the way - for those who keep arguing about Fox/CNN/MSNBC etc. with regards to "fair and balanced" vs. biased reporting -- this is the reason I prefer Newshour & NPR for electronic journalism. They really do get opposing points of view with genuine expertise, give both equal time, allow the issue to be explored in some depth, and keep the interviewer (Woodruff here) just asking questions, not taking sides with either. By the end of reading this piece, you can choose to agree with either Zandei or Edwards but you've heard both sides out and have a better feel for the issue at hand.)

The full transcript of this piece, including a discussion of Biden's 1,000,000 number, is at the link

http://www.pbs.org/newshour/bb/business/ju...ulus_10-30.html

There is no discrepancy between Biden's 1M and recovery.gov's 650K. Biden's claim is an additional 400K:

JUDY WOODRUFF: Biden added that money for tax cuts and state aid has created or saved another 400,000 jobs, bringing the grand total to more than a million.

Strength of the numbers

JUDY WOODRUFF: Mark Zandi, to you first.

Tell us, how solid are these numbers?

MARK ZANDI, chief economist, MoodysEconomy.Com: I think they're solid.

I think it's no accident that the recession, the great recession, has come to an end at just the same time that the stimulus is providing its maximum economic benefit. And I think the job impacts that the administration put forward today are reasonable estimates.

JUDY WOODRUFF: We know that the numbers come from state and local governments, from universities and companies reporting them. So, are the numbers, are they verified?

MARK ZANDI: Well, these numbers are. The 600,000-plus estimates from the administration come from recipients of the stimulus aid. And, so, we know for sure that these jobs are for real.

Now, of course, it doesn't count all of the other jobs created by the tax cuts and other elements of the stimulus. That is much more difficult to count, at least directly. But the 600,000-plus, that's numbers that are counted directly and accurate.

JUDY WOODRUFF: Chris Edwards, how solid do you think these numbers are?

CHRIS EDWARDS: I think these are really unscientific numbers.

We're relying on state and local governments and private businesses to tell us how many jobs they are creating with government money. So, there is an obvious incentive to overestimate how many jobs you are creating, because, you know, states want a second round of stimulus payments, so, of course, they want to make their federal masters happy by claiming they created a lot of jobs.

The broader picture is also very interesting. While the administration says it has created 650,000 jobs, we have lost eight million jobs during the current recession over the last couple years.

So, this is only about 10 percent of the overall job losses. And the unemployment rate continues to rise. So, while the government has created some jobs in the government sector, I think the private sector economy is still continuing to shrink.

JUDY WOODRUFF: Mark Zandi, what about his initial point, that this is unscientific and that these organizations giving these numbers have an incentive to inflate them?

MARK ZANDI: Well, I think there are -- all of the statistics that we get on the economy that the government collects are based on surveys and samples, similar to the one that was conducted here. So, I think they are using the same approaches and techniques in constructing these estimates then -- that we use for constructing all kinds of estimates to try to get a gauge of where the economy is.

So, there is a great deal of uncertainty with any of these statistics. But I think it's fair to say that we would have measurably fewer jobs in the economy today if we didn't have that stimulus package.

[I AM NOT THAT GUY 5,715]

The Newshour had a full discussion of the significance of the numbers, particularly the 650000 figure.

Judy Woodruff interviewed Mark Zandi (a noted economist who generally backs the stimulus plan) and Chris Edwards (a Cata Institute economist). Here's the excerpt where they talked about the numbers.

(By the way - for those who keep arguing about Fox/CNN/MSNBC etc. with regards to "fair and balanced" vs. biased reporting -- this is the reason I prefer Newshour & NPR for electronic journalism. They really do get opposing points of view with genuine expertise, give both equal time, allow the issue to be explored in some depth, and keep the interviewer (Woodruff here) just asking questions, not taking sides with either. By the end of reading this piece, you can choose to agree with either Zandei or Edwards but you've heard both sides out and have a better feel for the issue at hand.)

The full transcript of this piece, including a discussion of Biden's 1,000,000 number, is at the link

http://www.pbs.org/newshour/bb/business/ju...ulus_10-30.html

There is no discrepancy between Biden's 1M and recovery.gov's 650K. Biden's claim is an additional 400K:

JUDY WOODRUFF: Biden added that money for tax cuts and state aid has created or saved another 400,000 jobs, bringing the grand total to more than a million.

Strength of the numbers

JUDY WOODRUFF: Mark Zandi, to you first.

Tell us, how solid are these numbers?

MARK ZANDI, chief economist, MoodysEconomy.Com: I think they're solid.

I think it's no accident that the recession, the great recession, has come to an end at just the same time that the stimulus is providing its maximum economic benefit. And I think the job impacts that the administration put forward today are reasonable estimates.

JUDY WOODRUFF: We know that the numbers come from state and local governments, from universities and companies reporting them. So, are the numbers, are they verified?

MARK ZANDI: Well, these numbers are. The 600,000-plus estimates from the administration come from recipients of the stimulus aid. And, so, we know for sure that these jobs are for real.

Now, of course, it doesn't count all of the other jobs created by the tax cuts and other elements of the stimulus. That is much more difficult to count, at least directly. But the 600,000-plus, that's numbers that are counted directly and accurate.

JUDY WOODRUFF: Chris Edwards, how solid do you think these numbers are?

CHRIS EDWARDS: I think these are really unscientific numbers.

We're relying on state and local governments and private businesses to tell us how many jobs they are creating with government money. So, there is an obvious incentive to overestimate how many jobs you are creating, because, you know, states want a second round of stimulus payments, so, of course, they want to make their federal masters happy by claiming they created a lot of jobs.

The broader picture is also very interesting. While the administration says it has created 650,000 jobs, we have lost eight million jobs during the current recession over the last couple years.

So, this is only about 10 percent of the overall job losses. And the unemployment rate continues to rise. So, while the government has created some jobs in the government sector, I think the private sector economy is still continuing to shrink.

JUDY WOODRUFF: Mark Zandi, what about his initial point, that this is unscientific and that these organizations giving these numbers have an incentive to inflate them?

MARK ZANDI: Well, I think there are -- all of the statistics that we get on the economy that the government collects are based on surveys and samples, similar to the one that was conducted here. So, I think they are using the same approaches and techniques in constructing these estimates then -- that we use for constructing all kinds of estimates to try to get a gauge of where the economy is.

So, there is a great deal of uncertainty with any of these statistics. But I think it's fair to say that we would have measurably fewer jobs in the economy today if we didn't have that stimulus package.

Edited October 31, 2009 by Lone Ranger

[scandal 951]

MARK ZANDI: Well, these numbers are. The 600,000-plus estimates from the administration come from recipients of the stimulus aid. And, so, we know for sure that these jobs are for real.

As I said, by all means agree with the parts of the discussion that make sense to you. I agree that Edwards (CATO guy) made a powerful argument that the source of the data has a natural tendency to bias. Do please note the following however bit however:

MARK ZANDI: Well, I think there are -- all of the statistics that we get on the economy that the government collects are based on surveys and samples, similar to the one that was conducted here. So, I think they are using the same approaches and techniques in constructing these estimates then -- that we use for constructing all kinds of estimates to try to get a gauge of where the economy is.

If these numbers are biased, they are no more so than all other economic statistics that get trotted out (and acted upon by the financial markets, amongst others) all the time.

[Mr. Big Dog 10,747]

Well, the Obama administration could have fixed the official unemployment numbers by opposing the extension of unemployment benefits. Such a move would mean that fewer claims are filed, you know? So, by doing the right thing and extending benefits, the administration really shot itself in the foot. But it did the right thing under the economic circumstances regardless of the backlash it would create.

New claims is the number they use, not continuing claims. A bit of a non-sequitor there.

You can't derive the unemployment rate merely from new claims filed. Once businesses stop laying workers off, your unemployment rate would go to zero. That's not how it works.

You are correct after a fashion: A Republican president, I can't remember whether it was Reagan or not, decided a way to artificially lower the unemployment numbers was to exclude those folks no longer recieving benefits fron the unemployment rolls. They look at the number of new claims added in a week to the total number of claims from the previous week, less the number of folks dropped from the rolls that week, to determine the "official" unemployment number.

Exactly. And that official unemployment number would be well below 8% today if the administration and the Congress had not pushed for the extension of benefits. That's all I'm saying. In other words, barring the extension of unemployment benefits - which occurred after the prognosis was made that passing the stimulus package would keep the unemployment number below 8% - the administration wouldn't have the unemployment number related PR debacle on it's hands right now. Millions of people would be worse off, though.

[I AM NOT THAT GUY 5,715]

Well, the Obama administration could have fixed the official unemployment numbers by opposing the extension of unemployment benefits. Such a move would mean that fewer claims are filed, you know? So, by doing the right thing and extending benefits, the administration really shot itself in the foot. But it did the right thing under the economic circumstances regardless of the backlash it would create.

New claims is the number they use, not continuing claims. A bit of a non-sequitor there.

You can't derive the unemployment rate merely from new claims filed. Once businesses stop laying workers off, your unemployment rate would go to zero. That's not how it works.

You are correct after a fashion: A Republican president, I can't remember whether it was Reagan or not, decided a way to artificially lower the unemployment numbers was to exclude those folks no longer recieving benefits fron the unemployment rolls. They look at the number of new claims added in a week to the total number of claims from the previous week, less the number of folks dropped from the rolls that week, to determine the "official" unemployment number.

Exactly. And that official unemployment number would be well below 8% today if the administration and the Congress had not pushed for the extension of benefits. That's all I'm saying. In other words, barring the extension of unemployment benefits - which occurred after the prognosis was made that passing the stimulus package would keep the unemployment number below 8% - the administration wouldn't have the unemployment number related PR debacle on it's hands right now. Millions of people would be worse off, though.

It would be interesting to see the numbers, including how many seasonal workers would actually be working now, if they were not getting extended benefits. The DOL number has been holding pretty steady, about 16.5% when Bush left office, and 17.1% now.

[Mr. Big Dog 10,747]

Well, the Obama administration could have fixed the official unemployment numbers by opposing the extension of unemployment benefits. Such a move would mean that fewer claims are filed, you know? So, by doing the right thing and extending benefits, the administration really shot itself in the foot. But it did the right thing under the economic circumstances regardless of the backlash it would create.

New claims is the number they use, not continuing claims. A bit of a non-sequitor there.

You can't derive the unemployment rate merely from new claims filed. Once businesses stop laying workers off, your unemployment rate would go to zero. That's not how it works.

You are correct after a fashion: A Republican president, I can't remember whether it was Reagan or not, decided a way to artificially lower the unemployment numbers was to exclude those folks no longer recieving benefits fron the unemployment rolls. They look at the number of new claims added in a week to the total number of claims from the previous week, less the number of folks dropped from the rolls that week, to determine the "official" unemployment number.

Exactly. And that official unemployment number would be well below 8% today if the administration and the Congress had not pushed for the extension of benefits. That's all I'm saying. In other words, barring the extension of unemployment benefits - which occurred after the prognosis was made that passing the stimulus package would keep the unemployment number below 8% - the administration wouldn't have the unemployment number related PR debacle on it's hands right now. Millions of people would be worse off, though.

It would be interesting to see the numbers, including how many seasonal workers would actually be working now, if they were not getting extended benefits. The DOL number has been holding pretty steady, about 16.5% when Bush left office, and 17.1% now.

Well, there aren't a lot of jobs out there. Last number I heard for applicants per position we're trying to fill is about 600. That's a lot of applications for a single job. A lot more than it used to be for sure. And it's a pretty good indicator of just how bad the job market is.