More Rose-Colouring from Statistics Canada

Am I the only one who detected a distinct note of spin-doctoring in the write-up of Statistics Canada’s eye-popping labour force release yesterday?

Here are the first two paragraphs of the release:

“Following gains at the beginning of 2008, and little change from April to June, employment dropped by 55,000 in July. The unemployment rate edged down 0.1 percentage points to 6.1%, as many people, particularly youth, left the labour force.

While employment grew by 1.3% over the last 12 months (+227,000), the pace of growth has slowed in recent months. Employment gains have averaged 10,000 per month thus far in 2008 compared with an average monthly gain of 30,000 for 2007.”

Every junior reporter knows that the first words in an article (the “lead”) set the whole tone and conveys the main message.  In this case, the “lead” is not July’s dramatic decline in employment, but rather the nicer stuff that happened several months earlier.  We don’t get any perspective on exactly how bad the 55,000 job loss was (in historic terms, it was very bad).  Then we move quickly to the silver lining that the unemployment rate fell.  Then we have a second paragraph which is all about job growth, not job losses, based (see below) on some pretty dubious choices in numerical analysis.

This what-me-worry spin most definitely trickled into some of the subsequent media coverage of the data.  For example, the Globe and Mail’s headline warned readers not to be too worried about the largest single-month decline in employment in 17 years with this happy moniker: “Why this slump isn’t like the 1990s.”  Gee I feel better now.  I hope the 55,000 people who lost their job last month do, too.

Indeed, the Globe’s story cited an economist (James Marple at TD Bank) recycling the StatsCan 10,000 “average” job-creation pace in favourable terms, citing it as a “more reasonable” pace of job growth than the “unsustainable” pace of earlier this year.  (By the way, 10,000 jobs per month — even if that was a reasonable portaryal of what’s happening in the labour market, which it isn’t — isn’t remotely “sustainable” for an economy of Canada’s size: if the labour force grows at 1.5% per year, the economy needs close to 25,000 jobs per month just to absorb new labour force entrants.)

it also strikes me as pretty far-fetched to claim that “the pace of growth has slowed in recent months,” when in fact employment has now fallen for two months in a row.  “Slower growth” and “contraction” are two very different things.  “Average” job-growth over the past 5 months (as opposed to the past 7 months, which StatsCan reported) is a negative 4,000 jobs per month.  And the whole point of monthly releases is to add NEW data to our knowledge base — not to dilute what’s new in each release by going back and merging it with stuff we already knew (like the stronger job numbers from January and February of this year — which are the only reason StatsCan can pretend that employment is still growing).

I am maybe not a conspiracy theorist regarding StatsCan’s spin-doctoring (not to mention the regurgitation of said tone in much, but not all, of the media coverage).  But I have detected an increasingly gung-ho tone in much StatsCan economic commentary in the last couple of years, which I think is profoundly out of place (and may be worthy of a more thorough review and analysis — one of the worst examples, to my mind, was their very misleading review of Canada’s auto industry last year).

And I learned long ago that just because you may be paranoid, doesn’t mean that you’re NOT being followed.

3 comments

  • To answer your opening question (which was probably supposed to be rhetorical), I was struck by the same thing in reviewing yesterday’s Labour Force Survey.

    It’s worth noting that Jim Flaherty’s public response to the numbers (“Since the start of the year, over 70,000 jobs have been created in Canada”) was essentially a repetition of Statistics Canada’s second paragraph (monthly employment gains averaging 10,000 in the first seven months of this year).

    When employment increases in a given month, the Labour Force Survey release generally trumpets the increase. When monthly employment decreases, the release generally submerges the decrease in increases from previous months.

    In fairness to Statistics Canada, yesterday’s release clearly stated that the decline in unemployment was caused by people leaving the labour force. However, some TV news (which has little time for context) simply reported the lower unemployment rate.

  • As reported by the Globe, it Seems like Statcan and HRSDC received some scolding from a bit higher source then the our PEF Blog.

    So good quality comments, and let me stress quality on many dimensions.

    I believe a few of the bloggers here had input into the research conducted by this advisory panel. (count me as one, and if you know the history of my rants on here, you know it was quite therapeutic.)

    Labout market information is so so so important in these heady days of a global economy. HR development is the key to the future, capital is easy, it is the innovation from HR dev that is the hard part. (and no it is not a chicken egg scenario, it is HR dev and then capital dev)

    Hopefully some of these recommendations will lead to action. The full report will be publicly available in about a month. If the final report was done the way it ought to have been then it should be plugged by economists from every dimension.

    However let me put my pom poms away until the report is released publicly.

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