Unemployment rate tampering? Why conspiracy theorists went wild.
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| New York
Just a month before the election, did the White House 鈥渃ook the books鈥 to get the unemployment rate down to 7.8 percent in September?
That鈥檚 how retired General Electric chairman Jack Welch sees it.
鈥淯nbelievable jobs numbers..these Chicago guys will do anything..can鈥檛 debate so change numbers,鈥 said the missive from 聽after the latest jobs report came out Friday from the Labor Department.
Mr. Welch鈥檚 tweet has set off a firestorm of activity in the virtual realm. Conspiracy theorists jumped on board as if the Obama administration had hidden reports of UFOs landing in the Rose Garden.
鈥淛obs #s from Labor Secretary Hilda Solis are total pro-Obama propaganda鈥攍abor force participation rate at 30-yr low. Abysmal!鈥 wrote conservative radio host .
And , a favorite of the tea party, tweeted, 鈥淚 agree with former GE CEO Jack Welch, Chicago style politics is at work here鈥.鈥
Democrats quickly tweeted right back.
鈥渓ove ya jack but you鈥檝e lost your mind,鈥 wrote .
Welch is best known for making GE into a corporate dynamo. When he retired, he also became known for collecting a pension that many thought was excessive. In addition to collecting $933 million, he got an annual pension of $10.5 million and a chauffeur and use of the GE corporate jet for life. As if that were not enough, GE also agreed to pay his dry cleaning bills. 聽
In Welch鈥檚 case, Labor Secretary Solis appeared on CNBC to refute allegations that any massaging of the data had occurred.
鈥淵ou know I am insulted when I hear that because we have a very professional civil service organization where you have top economists working" at the Bureau of Labor Statistics (BLS), she said. 鈥淚t is really ludicrous to hear that kind of statement.鈥
When it reports the unemployment data each month, the Labor Department looks at two different surveys. The first survey asks 141,000 businesses and government agencies if they have hired anyone in the past month. This is called the establishment survey, and it showed that only 114,000 people had been hired by businesses in September, compared with an average of about 140,000 per month so far this year.
At the same time, the BLS contracts out to the Department of Census to call 60,000 people every month to ask if their employment situation has changed. This household survey determines the unemployment rate.
Using the household survey, the BLS estimated that last month 873,000 people had found work. After estimating the number of people who got fired or laid off, the bureau, using that survey, said that the number of unemployed people dropped by approximately 456,000.
It is not unusual for the number to vary greatly month to month, notes economist Joel Naroff of Naroff Economic Advisers in Holland, Pa. For example, in April the BLS reported that 342,000 fewer people had found jobs and in May it reported that 642,000 had found work.
鈥淭he unemployment rate will probably go back to 7.9 percent or maybe 8 percent next month,鈥 he says.
This is not the first time aspersions have been cast on the Bureau of Labor Statistics, according to Lawrence Mishel, president of the Economic Policy Institute, a liberal think tank in Washington. In 1971, President Richard Nixon was angered when the BLS attributed a drop in the unemployment rate from 6.2 percent to 5.6 percent in a month to a statistical fluke, says the EPI website.
Timothy Noah, writing in Slate, published excerpts from White House tape recordings in which Nixon and an adviser, Charles Colson, decide that a Jewish cabal at BLS is trying to undermine the president's economic policy. 鈥淲ell, listen, they are all Jews over there?鈥 he asks Colson. Then, in an official act of anti-Semitism, Nixon tells Colson, 鈥淎ll right, I want a look at any sensitive areas around where Jews are involved, Bob. See, the Jews are all through the government, and we have got to get in those areas. We've got to get a man in charge who is not Jewish to control the Jewish 鈥 do you understand?鈥