Saturday, August 04, 2007

This one goes up to 95.4

On one of the Fox News Channel's Saturday business shows (which may be called The Co$t of Freedom), there was a series of boosterish factoids flashing on the bottom of the screen. One said --

America's Employment Rate: 95.4%

If you're used to hearing more about unemployment rates, you'd be confused. Here's what clearly happened. The latest unemployment number for the US came out yesterday and it was up to 4.6 percent. This was deemed to be not Good News From America so they just flipped the number by subtracting it from 100 and so making it sound like a high number. How could something at 95.4% (other than a Saddam Hussein election result) be bad?

Two problems. First, by this standard, lots of areas have impressive sounding employment rates. For example, the Euro area would have an employment rate of 93%. So the greatness of George W. Bush only buys the US a lousy 2.4%?

Second, their style of economics would get an F. They think that the employment rate is the difference between the unemployment rate and 100. It's not. The employment rate is the percentage of the working age population with jobs. The working age population includes lots of people not in the labour force (which is the base for the unemployment rate) because of stay-at-home parents, students, and people who've stopped looking for work. For the US, it's 63.6%. But that's not a number that sounds good for the Fox News editors.

One might dismiss this as a pedantic quibble, except that these are the people who are planning on running a full time business news channel in a couple of months. Looks like they already have their mode of analysis up and running.

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