Friday, February 17, 2012

Mish gets it wrong about Gallup unemployment data

- by New Deal democrat

Mish, today:

The U.S. unemployment rate, as measured by Gallup without seasonal adjustment, is 9.0% in mid-February, up from 8.6% for January. The mid-month reading normally reflects what the U.S. government reports for the entire month, and is up from 8.3% in mid-January.

Regardless of what the government reports, Gallup's unemployment and underemployment measures show a sharp deterioration in job market conditions since mid-January.
Mish, one year ago today:

Unemployment, as measured by Gallup without seasonal adjustment, hit 10.0% in mid-February -- up from 9.8% at the end of January....
....The unemployment rate in mid-February is 0.8 percentage points lower than it was at this time a year ago, compared with a 1.1-point improvement at the end of January. This suggests that jobs are less available now than they were in January.

The best comparison of statistics is non-seasonally-adjusted numbers to the same month a year ago.
[my bolding]

Since the best way to measure Gallup's non-seasonally adjusted unemployment figures is YoY, by Mish's own standard (and I agree), let's look at where BLS unemployment stood one year ago, and last month for comparison:

2011-02-01 9.0
2012-01-01 8.3

Since Gallup's unemployment rate one year ago was 10.0%, and this year it is 9.0%, that suggests a 1% decrease. In other words, if I follow Mish's reasoning as set forth last year, this is consistent with BLS reporting an unemployment rate of 8.0% (9.0%-1.0%) for February this year.

Thanks, Mish.