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 ofÂ 2008, and little change from April to June, employment dropped byÂ 55,000Â in July. The unemployment rate edged downÂ 0.1Â percentage points toÂ 6.1%, as many people, particularly youth, left the labour force.
While employment grew byÂ 1.3% over the lastÂ 12Â months (+227,000), the pace of growth has slowed in recent months. Employment gains have averagedÂ 10,000Â per month thus far inÂ 2008Â compared with an average monthly gain ofÂ 30,000Â forÂ 2007.”
Every junior reporter knows that the first words in an article (the “lead”) set the whole tone and conveys the main message.Â In this case, the “lead” is not July’s dramatic decline in employment, but rather the nicer stuff that happened several months earlier.Â We don’t get any perspective on exactly how bad the 55,000 job loss was (in historic terms, it was very bad).Â Then we move quickly to the silver lining that the unemployment rate fell.Â 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.Â For example, the Globe and Mail’s headline warned readers not to be too worried aboutÂ the largest single-month decline in employment in 17 years with this happy moniker: “Why this slump isn’t like the 1990s.”Â Gee I feel better now.Â 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.Â (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 nowÂ fallen for two months in a row.Â “Slower growth” and “contraction” are two very different things.Â “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.Â 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).Â 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.