Saturday, February 27, 2010

What Does the Obama Job Chart Really Mean?


An old joke says that there are three kind of lies.

  1. Lies

  2. Damn lies

  3. Statistics
To that list, I would add data visualizations, especially when seemingly misused to purposely misinform the electorate.

By now, you've likely seen the chart, courtesy of Barak Obama's Organizing for America (OFA), showing the miraculous reduction in job losses after President Obama took office and the Congress passed the $787 billion Stimulus plan.


This visually-striking graphic is such fantastic news that Organizing for American even made a video highlighting the chart.




Something about this jobs chart bothers me. As of February, 2010, unemployment is still stubbornly high. So, how can it be that the Obama Administration seemingly eliminated unemployment? From the chart, it seems that the President halted and reversed unemployment to roughly the same level as December, 2007. I showed this chart to a number of engineering and accounting friends--people accustomed to working with charts and graphs--and they came to similar conclusions based solely on the chart. However, it is not true.

This chart seems designed to purposely deceive. How? The chart shows the monthly change in unemployment, not total unemployment. Of course, the original chart does not indicate this, but I've been able to reproduce the chart using source data from the Bureau of Labor Statistics.



How is this deceptive? Allow me to illustrate with an example. A man goes out on the town with his girlfriend to celebrate her birthday with dinner and a movie. Over the evening, he makes a number of purchases as shown in the table.

Graphically, the evening's spending per transaction looks like the following chart. At first glance, it appears that this lucky man had a great night on the town with his favorite girl and even turned a small profit. From the chart, one might assume that the man spent some money but then started making money after dinner and ended the evening with more money in his wallet than when he started!

How is this possible? It's not. It's a bit of graphical and presentation trickery. The chart shows the change in the data, not the present state.

The previous table and chart shows the amount of spending per transaction. However, the real effect on the man's wallet is the cumulative spending, as illustrated in the following table and chart.


While the spending per transaction, or the change in spending, is dramatic during the middle of the evening, it tapers off at the end. In fact, because the man found a $5 bill, the evening apparently ends on a high note! However, the cumulative, out-of-pocket expenses for the evening totals nearly $300. In one presentation of the data, the man apparently ends the evening with $5 in his wallet when in reality, he is down $300.

How does apply to Organizing for America's jobs chart?

The original chart shows the number of jobs gained or lost per month, or the monthly change in the jobs number. However, if the unemployment rate remains unchanged at 5%, 50%, or even 100%, the monthly change in unemployment is zero. Actual unemployment is not zero, just the monthly change in unemployment. See the difference? The following chart presents the cumulative job loss over the same time period, using the same data, and more clearly shows that unemployment increased over time and has not returned to December 2007 levels. While it is good news that monthly job losses have slowed (what the Organizing for America chart actually shows), the unemployment situation has not miraculously disappeared (what the Organizing for American chart seems to imply).


There are many ways to distort the visual presentation to reflect a particular political view. For example, here is the same data presented in yet a different manner. In this example, the chart compares cumulative unemployment during the final year of President George W. Bush's presidency and the first year of President Barak Obama's presidency. While the original graph seems to indicate that unemployment improved after President Obama took office, in reality the job market continued hemorrhaging!

Here is a chart of the showing the total number of officially unemployed based on Bureau of Labor Statistics data. The number is even greater than the cumulative chart before as there were over 7.5 million unemployed when the crisis deepened.



To put this into historical perspective, how does the current unemployment trough compare to those from prior recessions, measured in months from the beginning of the recession? The current trough is deeper and it appears will last longer than prior recessions.

The original Organizing for America chart appears to be purposely deceptive. It falsely appears to indicate that the Obama Administration has completely reversed unemployment when clearly, this is not the case. With the nation already split on so many issues, the electorate needs to operate from a truthful set of data without willful distortions. Sure, there can be multiple interpretations of the same data, but those interpretations should clearly indicate what data is presented.

See also ...

Provides previous examples how Organizing for America attempted to distort open and honest debate

Sources:

Bureau of Labor Statistics

Spreadsheets and Chart Data

  • All spreadsheets and charts used in this blog posting
    http://www.editgrid.com/user/soquel_by_the_creek/Obama_Admin_Job_Chart
  • BLS 1-month unemployment data
    1-Month Net Change
    Series Id: CES0000000001

    Seasonally Adjusted
    Super Sector: Total nonfarm
    Industry: Total nonfarm
    NAICS Code: -
    Data Type: ALL EMPLOYEES, THOUSANDS


    Year,Jan,Feb,Mar,Apr,May,Jun,Jul,Aug,Sep,Oct,Nov,Dec,Annual,
    2000,249,121,472,286,225,-46,163,3,122,-11,231,138,
    2001,-16,61,-30,-281,-44,-128,-125,-160,-244,-325,-292,-178,
    2002,-132,-147,-24,-85,-7,45,-97,-16,-55,126,8,-156,
    2003,83,-158,-212,-49,-6,-2,25,-42,103,203,18,124,
    2004,150,43,338,250,310,81,47,121,160,351,64,132,
    2005,136,240,142,360,169,246,369,195,63,84,334,158,
    2006,262,326,304,174,31,69,232,141,100,43,201,177,
    2007,194,104,239,92,149,55,-20,-71,52,86,128,70,
    2008,-10,-50,-33,-149,-231,-193,-210,-334,-458,-554,-728,-673,
    2009,-779,-726,-753,-582,-347,-504,-344,-211,-225,-224,64,-150(P),
    2010,-20(P), , , , , , , , , , , ,
  • BLS Unemployment Data
    Series Id: LNS13000000

    Seasonally Adjusted
    Series title: (Seas)
    Unemployment Level
    Labor force status: Unemployed
    Type of data: Number
    in thousands
    Age: 16 years and over


    Year,Jan,Feb,Mar,Apr,May,Jun,Jul,Aug,Sep,Oct,Nov,Dec,Annual,
    2000,5708,5858,5733,5481,5758,5651,5747,5853,5625,5534,5639,5634,
    2001,6023,6089,6141,6271,6226,6484,6583,7042,7142,7694,8003,8258,
    2002,8182,8215,8304,8599,8399,8393,8390,8304,8251,8307,8520,8640,
    2003,8520,8618,8588,8842,8957,9266,9011,8896,8921,8732,8576,8317,
    2004,8370,8167,8491,8170,8212,8286,8136,7990,7927,8061,7932,7934,
    2005,7784,7980,7737,7672,7651,7524,7406,7345,7553,7453,7566,7279,
    2006,7059,7185,7075,7122,6977,6998,7154,7097,6853,6728,6883,6784,
    2007,7085,6898,6725,6845,6765,6966,7113,7096,7200,7273,7284,7696,
    2008,7628,7435,7793,7631,8397,8560,8895,9509,9569,10172,10617,11400,
    2009,11919,12714,13310,13816,14518,14721,14534,14993,15159,15612,15340,15267,
    2010,14837, , , , , , , , , , , ,
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10 comments:

  1. Rick van der ArendMarch 10, 2010 at 1:06 AM

    I don't agree it is really deceptive. I don't think anyone believes that unemployment is back at earlier levels, when clearly it is not.

    It states Job loss: which is just what it shows.

    And it shows a nice feat: after growing numbers of job losses while under Bush, this has now come to a standstill. Actually, most reasons for the job loss probably come from actions (or lack of them) during earlier years, so pre-2007.

    So the thing is Obama inherited an economy in distress with a very black outlook and he managed to turn it around. Now how do you show this in a understandable way? This is a good try.

    ReplyDelete
  2. AnonymousMarch 10, 2010 at 2:56 AM

    I agree that the Obama chart was designed with an agenda, as all good charts should, but I wouldn't call it deceptive. Unemployment growth has slowed down. This shows that the forces that affect the economy have shifted. Many commenters feared that the job loss rate would continue to stay at very high levels for a long time even after signs of recovery.
    yes, unemployment is still at record high levels in the USA and this chart could be misinterpreted as establishing the opposite. It also fails to mention that the response to the crisis was mostly designed under Bush. still, it does show that the recovery plan has an impact on employment, which is a good news that Obama advisors shouldn't keep to themselves.

    ReplyDelete
  3. David SkyMarch 10, 2010 at 5:59 AM

    This is a great summary, thanks. You might have even included the total unemployment graph directly below the original graph, then described why it was relevant.

    ReplyDelete
  4. Robert KosaraMarch 10, 2010 at 6:13 PM

    The original chart is labeled "Job Loss" twice, once in the upper left and once at the bottom. This is not deceptive, it's just showing a particular aspect of the data. This has also been the data they keep talking about every time new unemployment numbers are reported: that unemployment is high (around 10% average across the nation), but that the losses are slowing down.

    So I also have to disagree that this is deceptive. Sure, you have to understand the difference between rate of change and current value, but this has been discussed at length on public radio and in other places. This was designed with an agenda, of course, but that doesn't make it deceptive. It's biased perhaps, and maybe one-sided. But it's not deceptive.

    ReplyDelete
  5. AnonymousJune 24, 2010 at 12:29 AM

    Great work!

    ReplyDelete
  6. RhymesWithOrangeJuly 30, 2010 at 2:42 PM

    So your complaint is that the chart CLAIMS that "the last guy was digging a hole, and I'm filling it in" when IN FACT what happened is "the last pilot put us into a nose-dive and the new guy just barely pulled us out of the dive."

    The video claims that "The economy is beginning to grow again". Wait, what part of "grow" don't you understand? The chart is clear, so I wonder how many people were really mislead by it -- I doubt very many. Were YOU really mislead or is this a rhetorical complaint?

    It reminds me of some FOX pundits I heard recently making fun of the Obama's defense of his performance. He defended himself by saying that he has saved a lot of jobs and they responded by making fun of that metric. Other presidents are judged on jobs created -- that's the measure. Not "jobs saved" they laughed.... Notice the inflection point [http://mathworld.wolfram.com/InflectionPoint.html] on your unemployment and cumulative job loss charts! Hello! No matter how you distort it, it's still there! Do you really not see it? Nose-dive followed by pulling up!

    Is my narrative of the charts completely fair accurate? It's as fair as yours. If we are going to be really fair, we would have to admit that the dynamics shown on the chart have only a little to do with policies implemented during the time period of the chart. And the Republicans have been doing everything in their power to sabotage the recovery for the middle class so that they can laugh at how bad Obama is doing at creating jobs. They just did it again twice this week!

    ReplyDelete
  7. UnknownOctober 24, 2010 at 5:41 PM

    Wow. You accuse Dr. Goolsbee of not knowing that "correlation is not causality" but you are upset that he discusses the first derivative. Pot, meet kettle.

    ReplyDelete
  8. Soquel by the CreekOctober 25, 2010 at 8:32 AM

    Jeff said...
    "Wow. You accuse Dr. Goolsbee of not knowing that "correlation is not causality" but you are upset that he discusses the first derivative. Pot, meet kettle."
    ====================
    Jeff, this post predates the Goolsbee "White Board" video. This was written in response to the original OFA chart, which if you look at it above, does not clearly indicate that the chart shows CHANGE in jobless numbers, not the TOTAL jobless numbers. Many people whom I showed the graph misinterpreted it until I explained it. Dr. Goolsbee did explain it in his video, shot a year after the chart first appeared.

    The problem with the first derivative, from a political rhetoric standpoint, is this. Let's say that the U.S. economy lost another 5 million jobs and held steady. The chart would STILL show a movement toward zero, because there would be NO CHANGE.

    ReplyDelete
  9. Soquel by the CreekOctober 25, 2010 at 8:52 AM

    Oran said ...
    Notice the inflection point [http://mathworld.wolfram.com/InflectionPoint.html] on your unemployment and cumulative job loss charts! Hello! No matter how you distort it, it's still there! Do you really not see it? Nose-dive followed by pulling up!
    ====================
    I do see the inflect point. But, think about it for a second. The inflection point would also be there if the economy lost another 1 million, 2 million, or 10 million jobs and then held steady. The chart would STILL show a movement toward zero, because there would be little or no change in the month-to-month jobless numbers. Either way, it's a false victory.

    Although I believe the Stimulus plan was bad policy (and worse politics), I do believe that it had a "shock and awe" or calming influence on the markets and the "group think" of the time. There was a seeming leadership vacuum in Washington between the election and the inauguration. The actual Stimulus money didn't arrive in the economy until much later.

    ReplyDelete
  10. Soquel by the CreekOctober 26, 2010 at 12:59 PM

    FYI to readers, the previous four comments relate to another, separate posting called "The Other Side of the White House White Board" from Kieth Hennessy.
    http://keithhennessey.com/2010/10/21/other-side/

    ReplyDelete

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