From It’s Still the Economy, Stupid:

Cassandra Revisted

Earlier today on Wampum, I hinted as to some developing controversy regarding tomorrow’s unemployment numbers. This has its roots the Cassandra Complex ™ I unfortunately developed back in January, when I first began to read the raw unemployment reports from the BLS [Bureau of Labor Statistics]. I noted back then that January’s employment picture looked particularly rosy not due to any major upswing in the economy, but because the Administration had altered the way it was collecting and reporting data, conveniently skewing results in the process. February and March’s results were also tampered with, but decidedly less so than January’s. Then, in April, I noticed that the BLS had planned in June to once again institute major changes to the employment reports. Whether these changes will effect the spinning of tomorrow’s unemployment report, I can’t say. But it’s also a question I noticed was asked by at least two media sources today:

Before investors react to Friday’s report, however, they may spend some time scratching their heads about it. The Labor Department is revising the numbers in its surveys of employers’ payrolls.

In addition to changing seasonal adjustments and updating benchmark figures, the department is shifting some job descriptions and moving some jobs from manufacturing into services in what it says is an effort to more accurately reflect the current economy.

Economists, on average, expect employers cut 39,000 jobs outside the farm sector last month, according to a Reuters poll, down from 48,000 job cuts in April — but prior data, going all the way back to 2001, are being revised, so comparisons to prior months might be difficult.

When I went over to the BLS press release on the changes, it stated that reports were being revised back to at least 1990! Talk about having the ability to rewrite economic history. In fact, for the sake of the historic record, maybe it’s time to start downloading the old data.

Since only CNN Asia and the Post noted the changes today, I’ll be curious to see how the report is spun tomorrow, particularly if it differs substantially from the 30-50K job loss forecasted by analysts and the market. But then again, if the unemployment rate jumps more than .1%, I suspect some great WMD (Weapon of Media Distraction) to suddenly appear.

[Update] I’ve been thinking about what these changes in the report might entail from a political perspective, and this fictitious exchange popped into my head:

Fox News, June, 2004

Sean Hannity: So, Terry McAuliffe, what again are these charges you’re making against our fearless leader’s stewardship on economic issues?

Terry McAuliffe: Under George Bush’s watch, this economy has lost 2.7 million jobs.

Hannity: 2.7 million? Who says?

McAuliffe: The Bureau of Labor Statistics.

Hannity: Really. Well, I’m looking at the website right now, and its says that George Bush has created 2.7 million jobs.

McAuliffe: Yes, but, but, but… that’s only because last summer, he had the BLS change all the numbers.

Hannity: Yes, sure he did, Terry (winking to the camera.) By the way, Terry, have you seen my Pulitzer, er, Peabody?

Okay, so now maybe I really am suggesting that people do in fact download the current statistics at the BLS website. Just in case.

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