Selective Data: State by State Unemployment

People who do selective data analysis should be beaten with sticks. Case in point: I got into a discussion with someone today who argued that the U.S. is far from monolithic in its economic downturn, with some states doing worse than others.

It was hard not to agree with that first point. It is, or should be, self evident. Some states were hit first and harder. But that doesn’t mean everyone won’t feel the pain eventually.

He disagreed, and here is the data he used. Not only are some states doing better than others, but more than half of the U.S. saw unemployment decrease in September, despite the gloom and doom of people (like yours truly) who say that unemployment is on a speedy ride to higher levels. Half! he said.

That caught me by surprise. Half went down in September? Really? So I went and had a look at the BLS data. And he was right: Unemployment rose in 21 states month-over-month in September, but fell in 23 states.

Q.E.D., right? Not really, or at least not in any meaningful sense. While more than half of the U.S. saw unemployment decrease in September, unemployment is up in 47 U.S. states year-to-date, and national unemployment has risen from 4.7% to 6.1% over the last twelve months.

The upshot? Classic selective data analysis. Unemployment is up across the U.S. and it’s going higher: Anyone who says otherwise is selling something -– probably a line of patter.

Comments

[whidbey:]

Good,

but why not add that significant unemployment virtually assures no inflation now or later, at least until unemployment falls. It does, on the other hand, point to the possibility of deflation induced by decreased demand, lower earnings and lower values for tangibles (and intangibles too probably). Deflation is one economic problem that most pols and economists have no idea how to manage, or cure. It is really bad news!!

2008 Nov 11 06:38 PM

[CLH:]

I think the states that have lower unemployment have something to tell us. Im sure that those states without Right to Work laws have much higher employment. Mimimum wage laws which were wrong in the first place should be repealed. Its better to have a job with less pay then no job. Energy and consumer prices are coming down.

2008 Nov 12 09:32 PM

[VintonCounty:]

Sometimes grouping data differently is for spin; other times it is to illustrate a point better. It depends on what question you are trying to answer. If you want to know the trend of national unemployment, the national aggregate data is appropriate. If you want to know why unemployment rates differ among states, then ranking states by unemployment rate would be appropriate. Develop the habit of rating the appropriateness of data that people throw at you.

2008 Nov 13 02:11 AM