Why Oh Why Can't We Have a Better Press Corps? (Yet Another Special Jonathan Weisman Edition): Archive Entry From Brad DeLong's Webjournal

February 10, 2004

Why Oh Why Can't We Have a Better Press Corps? (Yet Another Special Jonathan Weisman Edition)

Here I am, depressed once again at reading Jonathan Weisman. He tells his readers that the administration's "projections" for job growth in 2004 are serious (if likely to be overoptimistic) estimates rather than another act in the clown show that is administration economic policymaking. And he gets what the "projections" of job growth are wrong.

Bush Report Offers Positive Outlook on Jobs (washingtonpost.com): ...Mankiw released the White House's annual Economic Report of the President yesterday, predicting 2.6 million new payroll jobs by the end of the year.

To his credit, Jonathan Weisman is suspicious of the administration's--I can't call them forecasts or estimates--let's call them "projections," and signals his suspicions immediately afterward:

But such projections have proved problematic. Last year's report projected 1.7 million new jobs would be added in 2003. The 2002 report was even more optimistic, predicting 3 million new jobs in 2003. Instead, the nation lost 53,000 payroll jobs last year, the Labor Department says. "I know there will be jobs in the future," Mankiw told reporters at a news conference, "because I know this is a vibrant economy, a dynamic economy."

But Weisman doesn't seem to know the strongest reasons to reject the employment "projections" as just another act in the clown show that is administration economic policymaking. They are:

The 2.6 million new payroll jobs number comes from subtracting the current 130.1 payroll employment estimate from the 132.7 million number for 2004 in Table C-1, page 98 of the 2004 Economic Report of the President.
But the 132.7 million number is not an end-of-year number--it is a year average number.
Since the CEA assumes smooth employment growth over the year, that means that 132.7 million is the number the administration "projects" will be approached in June and exceeded in July.
To hit this target from today's 130.1 million payroll jobs number requires monthly payroll employment growth of 473,000 for the next 5.5 months and for the rest of this year--an unbelievable, absurd, ludicrous highballing of job growth.
To their (very slight) credit, sources that took part in generating these "projections" said yesterday that the 132.7 million number in Table C-1, page 98, is out of date. It is too high, because the "projections" assumed that employment today would be some 700,000 more than it actually is: we are already running 700,000 behind the payroll growth "projection" contained in the 2004 Economic Report of the President.
Thus the CEA's current "projections" are for a 2004 average employment number of 131.9 million, and for employment growth of 320,000 per month throughout all of 2004--that's a total of 3.8 million net new payroll jobs for the year, not 2.6 million.
Since the CEA is "projecting" real GDP growth of 4% in 2004, this "projection" of 3.8 million--3%--new payroll jobs in 2004 is not credible.
The 3% payroll job growth "projection" is not credible because 4% real GDP growth - 3% payroll growth - 0.5% for increasing work hours = 0.5% for productivity growth in 2004.
Since productivity growth has been averaging more than 3% per year since 1995, no economist who wants to keep any analytic credibility would forecast the collapse of productivity growth in 2004.
Indeed, if the administration had a real forecast--had a reason--to expect productivity growth to collapse, that would be real news. But it doesn't, so it isn't.
Why are Greg Mankiw and company sacrificing their analytic credibility by issuing an absurdly highballed employment growth forecast? Because if they didn't, then the 2004 number for the payroll employment column in Table C-1, page 98 would be equal to or lower than payroll employment when George W. Bush took office.
So somebody in the White House decided that Table C-1, page 98 could not contain a number that would allow reporters to write, "Bush administration expects 2004 payrolls to be below level at inauguration.
As of late yesterday afternoon, Greg Mankiw was not taking reporters' phone calls about the employment "projections," and not responding to reporters' questions.

Now I don't expect Jonathan Weisman to be able to fit more than one or two of these into his story. But it is disappointing that there is no sign that he has learned any of these facts. Even the simple point that the 132.7 million payroll jobs number for 2004 is an annual average number, and thus (since the administration is assuming smooth payroll growth) a June-July number rather than an end-of-year number escapes him.

Let me be clear here: In the past I have said (and firmly believe) that Weisman has taken a dive: written up a story in a way he knows or strongly suspects is wrong in order to curry favor with White House sources. That's not what's going on here. My complaint is not a personal, but a structural one. The Pear and Stevenson article in the New York Times does a worse job with this material than the Weisman one does.

Now make no mistake: Weisman is serving White House interests and conveying a false impression to his readers. He is leaving them with the impression that this 2.6 million job growth number is a serious (if likely to be overoptimistic) estimate of the future of the economy, rather than another act in the clown show. That's a bad thing to do. But he is doing so because he is not equipped to properly handle and analyze the information that comes to him on his beat. Moreover, he is chained down by the conventions of the daily news business. And he is up against a White House that is very, very good at using the conventions of the White House news business to trap him. (However, someone like Greg Ip at the Wall Street Journal does much better (although still not what I would wish).) Posted by DeLong at February 10, 2004 10:46 AM | TrackBack | | Other weblogs commenting on this post

Comments

You need to close the italics tag.

Posted by: Dennis O'Dea on February 10, 2004 11:15 AM

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Forgive a simple minded question. Why did the Economic Report of the President forecast an *AVERAGE* employment number of 132.7 million or whatever the current figure, rather than an *end of the year 2004* figure. Couldn't the politicos have met their political goal of not showing a net job loss over the 4 year period by using an end of the year figure?

Posted by: mr_crawford on February 10, 2004 11:53 AM

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Picking up where we left off -- Weisman in his earlier communication pointed out that he was an English major and a generalist. Perhaps a lesson in this is that it's easier to teach an economist to write than it is to teach an Emglish major economics, and that newspapers should hire accordingly.

Of course, Krugman ruined it for everybody. "Oh, no! Look what happned LAST time we hired an economist!"

Posted by: zizka / John Emerson on February 10, 2004 11:58 AM

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Brad,
While I agree with the general thrust of your criticisms, I believe the 2.6 million job growth comes from their forecast of annual avg employment in 2004 less their December 'forecast' of annual avg employment in 2003, not from subtracting the January 2004 SA level of employment from the annual avg forecast of employment for 2004.

Posted by: Bob Kirchner on February 10, 2004 11:58 AM

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http://www.cbpp.org/2-10-04wel.htm

Reversing Direction on Welfare Reform: President's Budget Cuts Child Care for More Than 300,000 Children - 2/10/04

This report, prepared jointly by the Center for Law and Social Policy and the Center on Budget and Policy Priorities, examines the Administration's estimates that the number of children receiving child care already fell by 100,000 over the last year, and will fall by another 200,000 over the next five years under its 2005 Budget. The report finds that even these estimates are significantly understated and far larger numbers of children are likely to lose child care assistance over the next five years.

Posted by: anne on February 10, 2004 12:51 PM

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I quit reading the report 20 years ago.

It has always been a political document that is of no value to anyone doing serious work on the economy.

Posted by: spencer on February 10, 2004 12:56 PM

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Spencer

Agreed, as usual. The problem is we may fail to focus on the attempt to slice to tatters social benefit programs while the budget is portrayed in mythical terms. We have a budget that does far too little to stimulate job creation and that is rapidly losing revenue. The solution is taken as spending cuts for social benefit programs. Oh dear.

Posted by: anne on February 10, 2004 01:07 PM

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Have a look at 1993-1995 in

ftp://ftp.bls.gov/pub/special.requests/opt/lpr/lprnfbrev0204.txt

Payrolls were growing but here’s the weird thing, the productivity index reads
1992 100.0
1993 100.3
1994 101.5
i.e. less than 1% growth over 2 years! So low producitivy growht and falling payrolls ahre hardl;y news

Posted by: Giles on February 10, 2004 01:10 PM

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Giles

Such a change in productivity and employment trends as you suggest is the remotest possibility. The American economy does not change course so rapidly. The data is interesting and useful, but not realistic just now. Also, the economic policy terms are different now. But, do I ever wish there were a fast turn in the labor market.

Posted by: anne on February 10, 2004 01:25 PM

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Yes why didn't they give an end of year number ? That way optimistic but not insane and no one but Brad would have noticed the dif.

By the way Brad, you are being hard on Jonathan Weisman. Lots of smart people missed the average vs end of year point. One does generally interpert what people say so that it isn't completely crazy.

It isn't that you give a f*** about dirty words is it ?

Posted by: robert on February 10, 2004 01:36 PM

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Looks like this is finally getting picked up (I wonder if it's independent of Brad's comments, or due to someone who has seen it):

http://money.cnn.com/2004/02/10/news/economy/jobs_forecast/index.htm

Posted by: matt on February 10, 2004 02:40 PM

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>>Yes why didn't they give an end of year number ? That way optimistic but not insane and no one but Brad would have noticed the dif.<<

Because it is the CEA's long-time convention that growth rates are given as four-quarter averages over the calendar year and that levels are given as four-quarter averages over the calendar year. And because the White House Media Affairs people who scrubbed the numbers didn't say, "Hey, change this to a year-end number."

With an honest job growth forecast of 200,000 per month, the end of year forecast is 132.3 million... oops, not quite large enough. With an honest job forecast of 230,000 per month, the end of year forecast is 132.8 million...

Posted by: Brad DeLong on February 10, 2004 02:48 PM

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Brad Brad -

Wonderful as always!

Anne

Posted by: anne on February 10, 2004 02:52 PM

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Reward -

http://www.nytimes.com/2004/02/10/science/10BONG.html

Call of the Dwindling Wild Returns Zoo Bongos to Home
By MARC LACEY

NANYUKI, Kenya — The bongo is not an animal known for going in circles. It surges straight ahead through the thickest of forests, with its reddish hue and striking white stripes confusing predators.

But a herd of 18 bongos now living at the base of Mount Kenya, Africa's second highest peak, has just completed the most circuitous of journeys, one that has taken them back to their ancestral home.

From 1966 to 1975, several dozen bongos were shipped from the wilds of Kenya to the staid confines of various American zoos. They thrived in captivity, breeding with abandon. Eventually, their American population exceeded 400.

Zoogoers loved them, with their cartoon character appearance making them stand out from more garden variety antelopes.

Posted by: anne on February 10, 2004 02:54 PM

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The average has lower statistical error than the year end figure. See the following post on seasonal adjustment factors.

Posted by: bakho on February 10, 2004 02:54 PM

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But it is disappointing that there is no sign that he has learned any of these facts.

C'mon Brad, be fair: it took us all a while to get the facts completely straight -- which is probably what the White House was hoping for all along.

I mean, did Enron's finances become clear right away?

Posted by: Billmon on February 10, 2004 03:07 PM

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The Post's Jonathan Weisman was online Tuesday, Feb. 10 to talk about the report and the U.S. economy. The following is the transcript of the first part of that online chat.

Jonathan Weisman: Good morning, everyone. We've got questions lined up so I'll jump right in.

_______________________

First caller: (Mr. Weisman (you) wrote, " Mankiw released the White House's annual Economic Report of the President yesterday, predicting 2.6 million new payroll jobs by the end of the year."

That is incorrect. The Annual Economic Report of the President predicted that the annual average number of jobs in 2004 would be 2.6 million higher than the annual average number of jobs in 2003. A year end job growth number consistent with the average annual growth in jobs prediction would be job growth of 5.3 million net new jobs from the end of 2003 to the end of 2004.
That is obviously an absurd forecast. There hasn't been one year in the last 60 years where job growth was that rapid. You should have caught this. For more on this topic go to Brad Delong's web blog.

Jonathan Weisman: I am not doubting your statistic, but when we quote a net figure like 2.6 million, it is a good representation of the real-world impact of the White House's projections.

Posted by: Bob on February 10, 2004 06:41 PM

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Come on Brad, no need to beat up on poor Weisman again. It's quite obvious this is all way over his head. He is just doing what he gets paid to do- shill for the conservatives. And one would have to admit, he does a very good job of shilling.

Posted by: non economist on February 10, 2004 06:50 PM

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Bob: good that you caught that, it is not up now:
http://www.washingtonpost.com/wp-dyn/articles/A6296-2004Feb2.html

The following is at the top of the page:
"The transcript follows.

"Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer."

Posted by: masaccio on February 10, 2004 07:26 PM

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Dirty words bespeak a common mind, unless there is a rhythm to't. He's vulgar, and there's an end on't.

Posted by: Lee A. on February 10, 2004 09:59 PM

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Good people strengthen themselves ceaselessly.

Posted by: Millman Cindy on May 2, 2004 05:25 PM

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Often the test of courage is not to die, but to live.

Posted by: Osner Miriam on May 3, 2004 04:19 AM

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If I could get my membership fee back, I'd resign from the human race.