Mark Twain once famously said there are “Lies, damned lies andstatistics.” He was referring to his self-compiled statistics onhis own writing production, but given Twain's general skepticism(he would probably have been a member of the Tea Party today), onecan easily imagine him applying it to any number of figuressupplied to us by the government.
It seems that for as long as I can remember, the government andthe national media have emphasized the unemployment rate as ameasure of our nation's economic prowess. Ronald Reagan, in his ownTea Party-like revolution in the 1980 election, often used it asthe source of his famous “Misery Index” (along with inflation).While it may have accurately assessed the nation's misery at thattime, even then it failed to accurately spell out our nation'sgrowth.
It turns out the unemployment rate really doesn't correlate wellwith economic growth (as measured by our nation's GDP. In fact,there's only a 31 percent correlation with the GDP. On the otherhand, our total employment correlates very well (i.e., 98 percent)with GDP growth. A white paper by Joseph LoMando explains this.Titled “What Employment Data Tells Us About the Economy,” LoMandosays he was able to derive this better correlation “withinminutes.”
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