Liars, damned liars, statisticians, and then pundits

The jobs report today is a great example of how statistics can be represented to make just about any case you want.

The number of jobs lost last month was reported as 539,000. This compares to an adjusted 680,000 average over the past five months. But the unemployment rate increased from 8.5% to 8.9%.

Anyone who wants to say that this is good news points to the decrease in jobs lost. Anyone who wants to say this is bad news points to the unemployment rate increase. The statistician points out that past numbers have been adjusted higher every month for quite a while, so the 539k will not stand up to the test of time.

Or if someone wants to say this is not as bad as previous recessions, they can point out that the unemployment rate is still much lower than in the 1980-1982 recession. But after adjusting for the older population (which any good statistician SHOULD do), it's actually worse.

Which brings me to pundits. Every news program brings on between 1 and 4 "experts" who opine about the numbers. It is really important to the general public to get a sense of what is going on so they can prepare themselves. Is the economy getting worse, in which case I need to save more, suck up at work more, and in general decrease my risk taking? Or is it getting better, in which case I can start spending again, look around at opportunities, and in general increase my willingness to take risks? So pundits are not just for entertainment; they provide an important service.

Except that they are not. They pick and choose the numbers that make the points that they prefer to make based on politics, selling their latest books, or just to get on TV. The general public are not statistics experts, macroeconomics experts, or mind readers. They need the news to give them a sense of reality. So these pundits are really doing us all a disservice. Shame on them!!!