Thursday, July 10, 2014

Adding up stats a job in itself

March 16. 2013 11:03PM
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UNEMPLOYMENT rose nationally, statewide and regionally, yet this was good news. How can that be?

First, remember that when the statisticians say up, they mean up by one-tenth of one percent. Not to dismiss the plight of the people behind those numbers, but scale matters. Critics eager to paint a picture of doom and gloom will routinely ignore the percentage and focus on the direction.

Second, the numbers are routinely adjusted later as more data comes in. Strictly speaking, national unemployment rose from the 7.7 percent reported last month to 7.8 percent. But when this month's rate was released, last month's rate was adjusted up, to 7.8 percent, meaning there was no increase.

Yes, it's confusing, but if pundits are howling about a one-tenth of a percent increase, then the details become more meaningful.

Third, and most important, the unemployment rate went up because more people have started looking for jobs. The unemployment rate didn't go up because more people are out of work; it went up because more people have started believing again that they can get work.

And they are right. As a Tuesday story in The Times Leader noted, December saw record levels of employment in several sectors, including a new record high in the supersector of trade, transportation and utilities (admittedly, this record was prompted in part by seasonal retail sales, but it's still good news).

The reality behind the paradox is clear in the local numbers. The Scranton/Wilkes-Barre Metropolitan Statistical Area gained 4,000 jobs even as the unemployment rate climbed from 9.4 percent to 9.5 percent. The increase in unemployment obviously occurred not because fewer people have jobs – 4,000 more people are working – but because 10,000 more people joined the labor force in the last 12 months.

So yes, beyond a doubt, the raw final number is distressing and should be unacceptable to all. At 9.5 percent, our area has the highest unemployment rate in the state, much higher than the state and federal rates of 7.9 percent and 7.8 percent respectively. It is justification for outrage and frustration.

But the data behind that raw final number is encouraging, and cause for some hope. There are more jobs available, prompting more people to enter – or re-enter – the workforce, people who previously may have just given up on the idea of getting a job and stopped looking.

So when the pundits and critics suggest that stories saying unemployment is up but the news is actually good make no sense, or – worse – show a media bias that masks reality, take it with a grain of salt.

Things are not good, but they are better. And that's not bias, that's math.

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