Archive for government statistics

More European “Growth” Shenanigans

10530873-european-union-logoEurope got some good news in early June as the EU changed its statistical guidelines on how to compute GDP. Among other changes, expenditures on prostitution and illicit drugs (hookers and blow, colloquially) will now be included.

Of course, some countries have been including these items for years. Back in 2006, the Greek government was able to increase its reported GDP by 25% overnight by including these items! The reason the Greek government made the change back then was to have more flattering debt and deficit to GDP figures than otherwise. We now know how that story ended.

As Tim Harford recently brought to light about Britain´s Office of National Statistics´ (ONS) attempts to include some of these less savory expenditures into its GDP calculation:

The ONS has made valiant assumptions in estimating that 60,879 sex workers are each employed 1,300 times a year at an average rate of £67.16. If true, that is an industry big enough to allow every man in the country between the age of 15 and 64 to visit a sex worker every three months.

For government officials putting stock in GDP figures when drafting new policies, maybe it´s time to come to the realization that these numbers obscure more than they expose.

(Cross posted at Mises Canada.)

A Lesson in Economic Analysis from the Minimum Wage Debate

Magician holding a magic wandMises Daily Tuesday by Ken Zahringer:

Supporters of government interventions like minimum wages often pretend the economy is far less complex than it really is, and then conjure up a statistic as evidence of success. Careful analysis reveals another story, however.

Video: Mark Thornton Discusses the Unemployment Rate

Mark Thornton explains why the government’s latest unemployment numbers are a sham, and the labor market is nowhere near recovered.

Audio: Behind the Numbers with Shawn Ritenour

Interviewed by Merlin Rothfeld and John O’Donnell, Associated Scholar Shawn Ritenour explains the truth behind the government’s economic data and the current macro market picture, and discusses the Fed’s current actions.

Video: Mark Thornton Explains the Latest GDP Numbers

Mark Thornton explains why the latest government GDP numbers are bogus.

Higgs: Looking Beyond the Unemployment Numbers

Robert Higgs, in spite of his reservations about writing op-eds, has written a great one for the McClatchy-Tribune wire:

One of the main reasons for containing our joy is that the rate fell from 7 percent in November despite the addition of just 74,000 net new jobs, a weak performance by any measure – and far below the 2013 monthly average of 182,000 new jobs. Another reason for caution is that the standard unemployment measure (U-3) provides a distorted picture of what’s taking place in the job market.

A better measure of the health of the job market is total employment: how many people have jobs. After all, it is employment that contributes to our well-being. Jobs, not unemployment, produce the goods, services and earnings that our families rely on. And on this front the picture is grim by historical standards, with 2 million fewer civilians working at the end of 2013 than at the end of 2007, when the economy began to tank.

But even this doesn’t tell the full story, because while the economy and job market have been struggling, the population has been growing. This means that a smaller percentage of the job-eligible civilian population – that is, non-institutionalized individuals age 16 and older – has jobs.

 

The Mises View: The Latest Employment Numbers

Mark Thornton explains what the latest government employment report really tells us.