Yesterday, Gallup released its monthly unemployment number which it derives from a very large poll. According to Gallup, unemployment hit 10.3% in February, the highest in almost a year. This morning the government released its numbers which also come from a poll (or a survey as the government calls it). The feds say that unemployment has declined to 8.9%, the lowest level in almost two years. So how can this make sense?
There are obviously some differences between the methodology of the two surveys, but they have been fairly close in the past. Even if the numbers did not agree between the two, the trends usually did agree. If the government found unemployment falling for four months, Gallup normally observed the same trend. But now we have seen many months in a row of falling unemployment according to the government while at the very same time Gallup has found rising unemployment. This cannot be explained by a statistical anomaly or by a difference in definition.
Beyond the difference between Gallup and the government numbers, there is also the problem of the low numbers of jobs created. For the last few years, stories on unemployment have consistently told us that the economy needed to produce something like 150,000 to 200,000 jobs each month just to keep unemployment steady. The numbers of jobs come from yet another survey by the government. The problem is that there has yet to be a month in the recent past when the economy produced the 200,000 jobs we were told were necessary to lower unemployment. Nevertheless, according to the government, unemployment has declined by about a full percentage point in the last four months according to the feds. Again, this simply does not make sense.
I am not a conspiracy theorist, but it certainly appears to me as if someone is playing with the numbers.
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