Inverted commas don’t look good on economists …

I don’t like to do this, but I’m getting a bit sick of bank commentary following the HLFS release.  This is specifically from ANZ’s weekly report this morning:

While employment tumbled 1.1 percent in Q1, the unemployment rate “only” rose to 5.0
percent as a number of workers leaving the labour force limited its rise

Three things:

  1. The participation rate fell after SPIKING LAST QUARTER.  It is still up on a year earlier.  The employment and PR series are notoriously volatile while unemployment is a fairly stable and reliable indicator – hence it is bull to say that this data is telling us that unemployment only didn’t rise further because people are leaving the labour market.  If it was fine for you guys to dismiss the lift in the PR in December (when anyone could have said unemployment only went up because participation rose) you should dismiss the fall now – you can’t cut it both ways.
  2. Stop using inverted comma’s when the data doesn’t suit your story.  The fact is that this unemployment rate was a hell of a lot better than any of us economists were expecting.  We should accept that, and try to understand it – instead of belting it with a stick until it fits our specific stories.
  3. Also, 5% is an only – there is no need for inverted commas.  5% is about New Zealand’s neutral rate – the level of unemployment we expect over the medium term.  After 15 months of recession I would expect unemployment to be higher than that – as a result this is a significant positive for the country.
  • I dunno, Matt. If economics is all about telling a story and the data doesn’t suit your story then don’t you have to trade off the readability of your story against its match with the data? I think these economists just have different preferences from you, in which case the story they’ve chosen just reflects their different value judgments about the importance of a fun, easy-to-understand story. Given that, and your emphasis on positive statements, don’t you think you’re being a little harsh on them?

  • “I think these economists just have different preferences from you, in which case the story they’ve chosen just reflects their different value judgments about the importance of a fun, easy-to-understand story”

    I guess I try to actually give clients an accurate outlook for the economy that allows them to balance risks – rather than simply trying to entertain them with smoke and mirrors 😉

    “Given that, and your emphasis on positive statements, don’t you think you’re being a little harsh on them?”

    No 😀

    If the data comes out and says something vastly different than you expectations it means that you should update your beliefs.

    Now, this was a huge shock to an essential indicator. Being sarcastic about the result because it doesn’t fit your story is not how an economist should behave – economists should sit down, look at how the result influences their view of the world, and then explain why.

    Yes my meta-analysis of economists is normative – but I’m never going to subscribe to a value judgment that infers that the only purpose of our forecasting is to entertain people, rather than to inform them.

  • @rauparaha

    I have no doubt that the stories will eventually react to the change in data – and that the economists will be thinking about how it all fits together.

    I just found the sarcastic, near dismissal, of a genuine and substantial surprise in the actual economic data to be extremely distasteful.

  • Matt Nolan :

    If the data comes out and says something vastly different than you expectations it means that you should update your beliefs.

    Well, that’s a normative judgment that I personally agree with but I accept that these bank economists have different views. I can see what they’re saying: imagine if Star Trek and Star Wars had to incorporate the laws of physics as we know them. Boring! Is there an inverse proportionality between the accuracy of your forecasting and the number of people who read it?

  • “Is there an inverse proportionality between the accuracy of your forecasting and the number of people who read it?”

    Maybe at some level – but I feel morally obliged to say when I’m wrong. IMO as soon as a forecast is finished your job is to explain why it is wrong, and where the balance of risks are shifting. It is important not to flitter around when the data is a tiny bit different – but this isn’t a “slight surprise” …

    I’m not sure sarcastic statements that ignore the data are particularly entertaining either …

  • Anyway, using inverted commas in that way is poor writing style.

    If the words are a direct, attributable quote then that should be made clear in the text. If the writer doing the quoting thinks the word is debatable, then single quotes are often used to denote his-words-not-mine or a similar idea. But it might be better to write the word and then (sic).

  • Stop using inverted comma’s when the data doesn’t suit your story.

    Stop using apostrophes when no letter was omitted.

    Sorry – it had to be said.

  • @Bill Bennett

    Good point – but I don’t think I’m in any position to criticise grammar …

  • @fibby

    Indeed my grammar is appalling – but can’t I also use an apostrophe to denote singular ownership, as in it’s ANZ’s weekly (a single ANZ) rather than ANZs’ weekly (multiple ANZ firms).

    Furthermore, there is a difference between bad grammar and using a sarcastic writing style to demean a result that doesn’t support your priors – I was criticising the use of inverted commas for the second, more important (IMO) reason.

  • goonix

    @Matt Nolan

    I believe fibby is referring to “comma’s”.

  • @goonix

    Ahhh that is unnecessary 🙂

  • Don’t you hate it when people pick on typos in blog posts? Soooo unnecessary! Matt’s obviously too literate to make that sort of mistake intentionally, so just let it go. Jeez, some people!

    [Can you tell I’ve had a poor morning?]

  • I put up with Matt’s terrible grammer for two reasons

    A) My grammer is worse
    B) If Matt took the time to carefully proof read his blog posts he would probably only have time to write half the posts he currently does, Cost > Benefit

    BTW Fibby, checked out your blog. Raupraha, Matt and I all did honors at VUW together, your posts have brought back some painful memories, haha

  • steve

    Inverted commas don’t look good on “economists”…