Rosenberg Scoffs at Job Numbers, Conspiracy Theories

Sunday, 07 Oct 2012 04:17 PM

By Dan Weil

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The job picture isn’t as rosy as indicated by the unemployment rate’s decline to 7.8 percent in September from 8.1 percent in August, says David Rosenberg, chief economist at Gluskin Sheff.

But that doesn’t mean the Obama administration has engaged in a conspiracy to present inaccurate employment numbers, as some, most notably ex-General Electric CEO Jack Welch, have charged, Rosenberg says.

"That the 7.8 percent jobless rate takes it to the level that prevailed when the president took office in January 2009 has raised many an eyebrow,” the economist writes in a report obtained by Business Insider.

Editor's Note: I Wish I Were Wrong — Economist Laments Being Right. See Interview.

“I don't believe in conspiracy theories. But I don't believe in the household survey either.”

Welch harped on the fact that payrolls grew only 114,000 in August. But that number is based on a survey of businesses, while the unemployment number is based on a survey of households. The household survey showed 873,000 jobs were created in September.

That surely exaggerates the labor market’s strength, Rosenberg and others note. But economists also point out that it’s common for the government to have vastly inaccurate data for a month and then revise it afterward.

To mainstream economists, the idea that the Obama administration could get away with fudging data compiled by career civil servants, is ludicrous.

Welch, who reportedly was slated to receive a flower allowance and free Knicks tickets from GE after retiring, may not be the best person to lecture on ethics.

Editor's Note: I Wish I Were Wrong — Economist Laments Being Right. See Interview.

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