Predestination - part the second

Ben Casselman's at it again. As regular reader may recall, these missives have pointed out that macro and micro data are very much brothers from different mothers. Micro data is, within a teeny epsilon, population while macro is samples. Today's piece is filled with quotes from important pundits, which make the points seen here.

First

"We have trouble measuring any of these things," said Tara Sinclair, an economist at George Washington University and for the job-search site Indeed. "This is definitely one of those situations where you can feed in the data and get out whatever response you're looking for."

IOW, the wiggle room in the data is sufficiently large that one can make any argument, plausible or not. Just take a look at the technical section of the Monthly Report to see the admission that the numbers are of Gumby.

BLS analyses are generally conducted at the 90-percent level of confidence.

For example, the confidence interval for the monthly change in total nonfarm
employment from the establishment survey is on the order of plus or minus 115,000.

Let that warm and fuzzy sink in. OK, back to Casselman's quotes.

Second

Despite the familiarity of the average hourly earnings figure, however, economists say that it is among the least reliable indicators, especially in the short run.

Third

Most government statistics, for instance, have failed to adapt to the rise of the so-called gig economy and other trends that are changing the relationship between companies and workers. The hourly earnings measure in the monthly jobs report excludes Uber drivers and similar contractors.

Now, does that bit of missing data mean; A) higher earning folks are being missed or B) lower earning folks are being missed? The answer, naturally, is B. IOW, the data/report are, to an unknown degree, rosy.

Fourth

Moreover, Americans are increasingly refusing to respond to government surveys. The response rate to the monthly Current Population Survey, the data source that underlies the unemployment rate and many other key statistics, has eroded in recent years. Of the households that do respond, about a third refuse to provide information about their earnings, a rate much higher than for most other questions. Similar problems have affected other government and private-sector surveys.

Without accurate macro data, all we get is demogogic policies. Demagogues prefer to ignore data, but when the data is known to be wonky, pushback gets tougher.