Arab Today, arab today ripples of revolt over tyranny of economic data
Last Updated : GMT 09:57:19
Arab Today, arab today
Arab Today, arab today

Ripples of revolt over tyranny of economic data

Arab Today, arab today

Arab Today, arab today Ripples of revolt over tyranny of economic data

Washington - AFP

On Friday the US government will publish the latest snapshot of the labor market, a guidepost marking the path of the world\'s largest economy. Regardless of the outcome, billions of dollars will change hands on Wall Street, currencies will shift, tilting the calculus of global trade, and governments will find it cheaper or more costly to borrow. The report may even help decide who will occupy the White House after November\'s elections. Charles Biderman does not care. While other investors are busy predicting how many jobs the economy created last month (162,000 is the average guess) and what the unemployment rate was (most guess 8.2 percent), Biderman, a portfolio manager, is unimpressed. \"The media nitwits will report whatever the number as if it were the gospel truth,\" he recently told clients of his firm, TrimTabs Investments. He was only slightly less disparaging about his Wall Street brethren: \"Those who need the action will trade the number as if it means something.\" Biderman and other critics argue the Bureau of Labor Statistics\' figures amount to little more than guess work, based on a pitifully small sample of data, which in any case is subject to heavy revision. \"The BLS says that they have 90 percent confidence that their monthly estimate is accurate to within plus or minus 100,000 jobs either way,\" he explained. \"That means that if this Friday\'s number is reported as 100,000 new payroll jobs, in reality the job gain could be anywhere from 0 to 200,000. And the nitwits would treat the 100,000 number as the gospel truth.\" \"This is nuts.\" After months and years of conflicting and oscillating economic data, that kind of critique strikes a chord. Recent reports have shown a rise in manufacturing jobs, another showed a steep drop, one showed a drop off in retail hiring, another showed the retail sector going gangbusters. Rarely is data free from \"noise\" the type of one-off quirks that make it difficult to take figures at face value. Recently that noise has included a unseasonably warm winter and the shifting dates on which Easter falls and Chinese New Year. In short, the daily deluge of data can leave little more than a stupefying smog of statistics. But others argue that is not reason to blame the messenger. After all, the government and other data providers openly explain their methodology and frequently remind consumers that one datum does not a trend make. Part of the reason for frustration may be that people who would not normally pay a great deal of attention to economic data now take a keen interest, according to Aparna Mathur, an economist at the American Enterprise Institute. \"I think since the start of the recession people have become more aware of the jobs numbers and anticipate them every month as an indicator of what\'s happening with the economy in general,\" Mathur said. Jason Schenker, president and chief economist of Prestige Economics, says many of these people have a poor understanding of the data and may misread or ignore salient details. \"People have a low level of numeracy and so some of the underlying developments are completely overlooked,\" he said. Mathur believes the way the unemployment figures are reported understates the depths of the problem, but it is still a good measure of the state of affairs. \"I am sure it has problems like all other surveys, but I would not call it a poorly done survey.\" \"I think the employment numbers are a good way of judging the health of the economy,\" she said. Frustrated Americans are not yet ready to shoot the messenger, but a few are starting to take pot shots.

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Arab Today, arab today ripples of revolt over tyranny of economic data Arab Today, arab today ripples of revolt over tyranny of economic data

 



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