When the big bump down from 8.1% unemployment to 7.8% came last week Jack Welch raised an eyebrow, and he did it on Twitter.
He questioned the validity of the numbers and insinuated that perhaps the books had been cooked just in time for the election. The left establishment unloaded on him, and basically said that Welch should get fitted for a tinfoil hat.
But he has a point. Over 2 months unemployment dropped from 8.3% to 7.8% (using current BLS standards, older standards would put unemployment much higher). That, as Welch states in the attached op-ed in the Wall Street Journal, would indicate a rip-roaring economy. Though we are not in free fall, as Welch also says, the economy is limping along, certainly not making bold strides.
For the record, the conservative American Enterprise Institute, came out and said that questioning the BLS numbers was wrongheaded. Given that much of AEI’s data in the employment area is based on BLS numbers perhaps this should not come as a surprise.
Indeed, Welch may be wrong. Perhaps the move down in the unemployment number is completely legit. But the move is unusual and deserves a close look.
Trusting government numbers blindly is rarely wise.