Asymmetrical Information - Megan McArdle
10.05.12 6:33 PM ET
Why Would the BLS Bother to Cook the Books?
The jobs report that came out this morning was incredibly confusing. On the one hand, the number of payroll jobs went up by only 114,000. On the other, the household survey (which is more volatile) reported a whopping 873,000 new jobs, and an unemployment rate down to 7.8%.
Incredibly, this triggered conspiracy-mongering from conservatives, ranging from outright lying by the BLS, to the suggestion that maybe a bunch of Democrats lied about getting jobs in order to boost the president's chances at the polls next month. This is crazy talk. First of all, conservatives are the people who believe that the whole federal government is basically run like the DMV. Why on earth would you suddenly believe they're capable of mounting such a vast conspiracy? Second of all, if you were going to try to boost the president's fortunes, surely you would pick a more inspiring number than a lame 114,000 net new jobs.
The truth is more boring: the household survey is super-volatile. Also, about 500,000 of those new jobs were part time, and may represent some sort of seasonal boost that will quickly disappear.
There's another reason to disbelieve in a conspiracy: the number comes too late to do any good. Most of the political experts I've talked to think that late-breaking good news on unemployment doesn't help you . . . and the reason they think this is that George H. W. Bush had good employment numbers in the fall, with a sharp October decline in the number of unemployed, yet he nonetheless went down to defeat. If you go along for four years with an unemployment rate of over 8%, then suddenly dip to slightly below that figure, voters do not simply go "Hurray! The president finally fixed the economy just in time!" They think "Maybe it's really getting better, and maybe it's a blip." (As in fact, the 1992 October jobs report sort of was--the number of people out of work rose again the following month, though in the context of a distinct downward trend).
If the folks at the BLS were capable of this sort of sinister conspiracy, they'd probably have been smart enough to have started it earlier, when it would have actually made a difference.