No, our economic statistics were not painting us an unusually rosy picture last fall. Yes, the state of the American economy is very disappointing. But the gap between what the statistics tell us and the amount of disappointment present in the actual reality—there was no sense in which that gap was unusually large last fall…
America’s economic data wasn’t hiding an unusual crisis—voters were just misled into believing one existed. The real distortion was in the narrative being fed to and believed by voters. Yes, America’s underemployment and inadequate wage rate is 24%, but that or worse has always been the case. And to say that there was an unusual gap between reality on the one hand and official statistical measures on the other is simply wrong…
A rather odd piece last week from the smart, thoughtful, and usually careful Gene Ludwig:
Gene Ludwig: Voters Were Right About the Economy. The Data Was Wrong: Here’s why unemployment is higher, wages are lower and growth less robust than government statistics suggest…. Many Democrats were puzzled by the seeming disconnect between “economic reality” as reflected in… statistics and the public’s perceptions…. They charged that right-wing echo chambers were conning voters into believing entirely preposterous narratives about America’s decline…. What they rarely considered was whether something else might be responsible for the disconnect — whether, for instance, government statistics were fundamentally flawed… <https://www.politico.com/news/magazine/2025/02/11/democrats-tricked-strong-economy-00203464?cid=apn>
And:
Gene Ludwig: Voters Were Right About the Economy. The Data Was Wrong: ‘The filters used to compute the headline statistics are flawed… paint a much rosier picture of reality than bears out on the ground. Take, as a particularly egregious example… unemployment. Known to experts as the U-3, the number misleads…. It counts as employed the millions of people who are unwillingly under-employed…. It does not take into account many Americans who have been so discouraged that they are no longer trying…. [It] does not account for the meagerness of any individual’s income…. I don’t believe those who went into this past election taking pride in the unemployment numbers understood that the near-record low unemployment figures — the figure was a mere 4.2 percent in November — counted homeless people doing occasional work as “employed”…. If you… include as unemployed people who can’t find anything but part-time work or who make a poverty wage (roughly $25,000), the percentage is actually 23.7 percent. In other words, nearly one of every four workers is functionally unemployed in America today — hardly something to celebrate… <https://www.politico.com/news/magazine/2025/02/11/democrats-tricked-strong-economy-00203464?cid=apn>
My first reaction is: This has always been the case. Always.
And the Bureau of Labor Statistics knows this.
