October 6, 2012 - Statistics don’t lie, but sometimes they can be confusing.
Check this story that appeared Friday on VOCM, under the headline “Big Drop in NL Unemployment Rate”:
“The unemployment rate in Newfoundland and Labrador has dropped by almost a half percentage point. The rate, which stood at 12.7 in August, dropped to 12.3 in September. Nationally, the domestic economy is coming off one of the strongest job creation months of the year.”
While statistics may not lie, they can certainly deceive. If you look at the Statistics Canada chart from which this news item was generated, you see that the news for Newfoundland and Labrador isn’t nearly as happy. Here’s the link:
In actual fact, the Newfoundland and Labrador labour force shrunk by 1,400 and the number of jobs fell by 200. And because the pool of labour contracted more than the number of jobs, the unemployment rate actually appears to go down. This is not cause for celebration and certainly not a “big drop” in the unemployment rate.
The story quickly moves to the national figures, where they use the same math – in reverse – to describe the situation. Here’s the rest of the story, copied verbatim from the VOCM site:
“A surprise addition of more than 52,000 new jobs last month was five times what economists predicted. The gain was the third biggest of the year and was way better (than) the 10,000 jobs analysts were expecting. It wasn't enough to put a dent in the unemployment rate, which actually edged up one tenth of a point to 7.4 per cent. That's because thousands of Canadians found work in September, almost 73,000 joining the labour force.”
In other words, the number of jobs grew by 52,000 while the number of job seekers grew by even more. Outside of Atlantic Canada, many provinces experienced huge growth in their labour pools, resulting in a gain of 72,700 people nationally looking for work. This is obviously higher than the new job creation numbers and accounts for the rise in the national unemployment rate. VOCM used those raw numbers to explain away the national unemployment rate, but ignored the very same – yet opposite trending – factors that are driving the provincial rate.
To put it another way, they used background data to identify good news in the national figures, but ignored the same data to put a positive spin on provincial numbers.
I would dismiss this as just not reading the chart properly – I despise charts too – but they seem to have fully understood the factors in the national instance. Why not the provincial numbers too?
So what’s up? An honest error committed in “cut and paste”? Or is VOCM, known for touting “good news stories,” trying to make a silk purse with a sow’s ear?