Unemployment: Are those figures credible? [update 2]
While I’m asking you questions about your own experience, how does your own experience gibe with the “seasonally adjusted” unemployment figures released yesterday showing an unprecedented and frankly enormous drop in unemployment from 7.1% to 6.0%, a drop of 25,000 (from 165,000 to 140,000).
They’d be great news all round if true—but they’ve also been greeted with surprise by many people; and we do know too that the figures are based on surveys, not on raw figures, and that the government departments involved in collecting and calculating the figures have made mistakes with their maths before. So given this is the largest drop ever in reporting these figures, and that these figures are used by central planners to play around with us (Alan Bollard, for instance, was heard gargling loudly yesterday) there are grounds at least for caution in accepting the figure as real, don’t you think?
So to at least begin measuring the credibility of the figure (and because what we each see in our own business is what we really base business decisions on), how does your own day-to-day experience fit with the figures?
Does what you’ve seen tend to support what the figures say? Or vice versa?
UPDATE 1: Matt Nolan comments at The Visible Hand:
“Labour market improving rapidly. But still weak.”
Yes the labour market is recovering incredibly rapidly. Yes the labour market is still weak…
The labour market data is strong than expected, but it is a very backwards looking indicator. It appears that workers have been willing to take lower wages to get back in the labour market…
I’d take this as a sign that our labour market is more dynamic, robust, and flexible than I’d previously realised. That is good. But it doesn’t mean the NZ economy is on the verge of taking off.
UPDATE 2: Lindsay Mitchell kindly sent me a link to a surprisingly sane discussion of the figures with Ganesh Nana of BERL (and I say surprisingly sane because Nana’s BERL is responsible for the fantasy figures used by the Law Commission in their campaign for alcohol wowserism; and for nonsense like the economically bereft claims for building KiwiRail units locally).
Anyway, click here for the audio.
And Lindsay herself observes that unemployment figures quoted are for what’s called the Household Labour Force Survey, “which has its limitations being based on a sample survey. The figure may yet be revised. (The December figure was revised from 7.3 to 7.1).
“[Meanwhile, the actual] unemployment benefit numbers dropped from 66,328 at the end of Dec 09 to 60,211 at the end of March 2010. [A drop of just 6,117.] Yet 1.1 percent of the labour force represents something like 24,000. I am still waiting for the data that will show many people went off the dole and onto a student allowance … “
So, in a nutshell, the 'official' unemployment rate doesn't fill Lindsay with optimism either. How about you?