Two Lingering Suspicions About Economic Statistics

The conspiracy theory that Barack Obama’s administration is brazenly making up economic statistics really isn’t credible. The argument that the official unemployment rate disguises the true state of the economy does have merit, but this has more to do with changes in the labor market than changes in how unemployment is measured.1471038273243

There are two other suspicions about government economic statistics, though, that can’t be so easily dismissed. One is that the government numbers are unnaturally smooth, the other is that they suffer from what economics-data skeptic John Williams charmingly dubs “Pollyanna creep,” the tendency of statistics agencies to make adjustments that -- on balance, over the decades -- leave the data looking rosier than the economic reality. Here are some thoughts on both.