Sunday, June 19, 2011

Anti-Couéism and Pittsburgh's Economic Psyche

This is the literal quote on the front page of the PG biz section today:
"Pennsylvania joined 12 other states that saw unemployment rates rise, and 13 states saw little change from April to May".  (emphasis added)
Pretty clear isn't it?  Pennsylvania unemployment rate UP. Bad, bad bad.....

It may be our cognitive dissonance that is so bad?  As a point in fact, the reported unemployment rate for Pennsylvania went down between April and May.  Most headlines I saw an the same exact data release made clear that the state's unemployment rate dropped. The press release the state blasts out to everyone is relatively clear as well.

Talk about glass half empty.  The AP story that I think that snipped was derived from was not about 12 states with unemployment rates going up, but about 24 states with unemployment rates going down. PA is one of the 24, not the 12 mind you.  Glass 2/3rd's full? 24 down (good), 12 up (bad), 13 unchanged.  Now go back and read what made it to ink here. Words matter, and words impact sentiment and even economists now begrudgingly accept that sheer sentiment is part of the economic equation.

So I understand and encourage scepticism and parsing of all factoids like that, but the "unemployment rate" is the "unemployment rate" and has a clear definition.  I'll be the first to pounce on overinterpretation of data from any one month and prefer to look at longer term trends.  So what does the trend for PA show?  Continuing and steady decline in the unemployment rate maybe? I actually think the recent trend in Pennylvania's unemployment rate is one of the steepest declines in the unemployment rate in Pennsylvania history.  Might be a small story in that somehow for someone.

I don't mean to be harsh on the one snippet, and yes I suspect the intention was to write something about the overall jobs numbers, but that is not what was written.  Deep down this all reflects something region-wide in our consciousness.  Any economic bad news is taken as Gospel truth, while anything remotely positive is discounted as an aberration or just plain old bad data that can't possibly be true under any circumstance.  Gets weird sometimes in the extreme cases. 

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