I’ve gotten to the point where whenenever I see or hear an economist quoted, I think of Jay Walking, that gag Leno does when he goes out into the street and asks people questions like, “Who is the President of the United States?” and they answer, “like, the one right now?”
Unemployment is down to 5.5% (from 5.6% in January and 5.8% in December), but don’t tell that to Jay Walking economists. In today’s Wall Street Journal Online, Bill Cheney, chief economist for John Hancock, says February’s decrease in the unemployment rate “may yet prove to be a statistical fluke.”
Mr. Cheney argued that seasonal adjustments may have made February’s jobs figures appear more bullish than they really are. He theorized that there were fewer-than-normal layoffs in this year’s post-holiday period, largely because there was less hiring before the season began. As a result, statistical tweaks intended to adjust for post-holiday hiring patterns may have skewed the employment picture, he said.
Wait a minute. Is this the same Bill Cheney who told the Washington Post two months ago:
“Even though the December employment report was slightly better than expected, it’s still too early to say we’ve hit bottom,” said Bill Cheney. “It’s as if we’re sliding downhill in the dark. We’re on a more gentle slope now so we hope that we’re at or near the bottom, but we really can’t tell yet,” Cheney said.
Okay, Mr. Cheney, we’ll be watching the unemployment rate each of the next three months to test your “seasonal adjustment theories.” We’ll also be tracking those stats for Merrill Lynch Chief Economist Bruce Steinberg, who according to the wsj.com, wrote this to clients on Friday:
“In our opinion, faulty seasonal adjustment in the last two months is responsible for the decline [in the unemployment rate].” Mr. Steinberg said he expects the unemployment rate will continue to rise through the middle of the year, possibly to as high as 6%.