Tuesday, April 03, 2007

no water at all

Talk about the glass being half empty, our glass must drain out the bottom. This article on the latest regional unemployment numbers cries out for comment. The nominal data shows that local unemployment rate dropped 0.7 percentage points to the lowest rate since the early 1970's. Now I agree this is likely some form of statistical aberration that will likely correct itself next month. Nonetheless, the way this has been warped into a completely negative story about the region is really quite excessive.

Overall, I think obsessing over month over month changes is not fruitful. I suggest looking at moving averages over several months if you really want to think about trends. So this latest monthly datapoint will pull down the moving average for recently reported numbers.


so keep watching next month, if as many suspect this overly low unemployment number reverts to a higher number, what will the headline be? The news blurbs will probably talk about the big 'jump' in unemployment rates with little mention of this months abnormally low number. Will that be consistent with this months 'story' which says this big drop probably didn't happen.

Anyway. Another important way to look at this number is not the unemployment rate itself, but how it compares to the US. That graph looks like this:

Difference Between Pittsburgh MSA and US Unemployment Rates
1970-present

Update:

I have put this data also on swivel. You can access it here.

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