This Is Simply Not a Mistake Real Economists Ever Make: Put me down as disgusted by Lee Ohanian’s defensive claim that his subtracting an establishment-survey number from a household-survey number was a natural error because “typically, job growth in these two surveys move together very closely…” They do not.

WHEN I WAS ELEVEN economist Joseph Froomkin told me, as I strained to understand his extremely strong Shanghai-Russian accent, that the failure of these two surveys to move together over the business cycle showed how serious the problems of measuring economic statistics were, even in countries with world-class statistical systems. He then handed me his copy of Oskar Morgenstern’s On the Accuracy of Economic Observations. (No: I could not then really read it, or really understand it.) But no competent economist ever mixes and matches data from two different sources without careful, careful consideration. And thus I have grave questions to ask the Economics Department of the University of Rochester:

Barry Ritholtz: Hoover Withdraws Discredited Article: ‘You may have missed this little brouhaha over the Thanksgiving weekend. We posted an analysis <ritholtz.com/2024/11/le… of a deeply flawed (dare I say fabricated?) data analysis from the Hoover Institution <ritholtz.com/2024/11/le…… [that] went viral recently….. ? A little digging by Invictus here <ritholtz.com/2024/11/le…> (he does amazing work) led to some very obvious analytical errors. Not that these mistakes stopped many politicos and even journalists from blindly repeating the mistake. “Rip & Read” journalism still lives.

Michael Hiltzik of the L.A. Times did a very thorough follow-up <ritholtz.com/2024/11/le…. Hoover has retracted the published article. Its author, Lee Ohanian, deleted his Twitter account. This is the second such time a basic ECON101 error appeared from this author and this source. (We may have to dive deeper into the archive to see what else was wrong). Journalists are advised to stop parroting hired guns for the Fast Food industry or other partisan players… <ritholtz.com/2024/12/ho…>

And:

Invictus: Never Mix Payroll and Household Survey Data: ‘Let’s cut to the chase: A Hoover Institution analysis of California private job creation is off by a factor of 100. Between January 2022 and June 2024, the state created 523,700 private sector jobs — not 5,400 as claimed. MSM uncritically repeated the false number. I spend far too much time debunking economic bullshit. Sigh…. Hoover Institution’s Lee Ohanian wrote a piece last April <hoover.org/research/cal… falsely claiming that California’s new minimum wage law had cost the state almost 10,000 fast food jobs. The story was false. Some sleuthing uncovered the fact Ohanian had inappropriately relied on data that was not seasonally adjusted.… He eventually walked his error back, but only when confronted by Michael Hiltzik <hoover.org/research/cal……. Once again, Ohanian is back…. “Between January 2022 and June 2024, employment in US private businesses increased by about 7.32 million jobs. Of these 7.32 million jobs, about 5,400 were jobs created in California businesses…. California has been among the worst-performing states in the country in terms of job growth…. Nearly all jobs that are being created in California are government jobs”…. (De-emphais added; the statements that are untrue or questionable are struck through)…. “Total jobs”… [is] Household Survey. From that, the good professor is subtracting “government jobs… from the Establishment Survey… <ritholtz.com/2024/11/le…>

And:

Michael Hiltzik: The Hoover Institution says all recent California job growth has been in government jobs. That’s completely wrong: ‘Ohanian acknowledged in an email that he had erroneously considered the household and establishment figures similar enough to treat them as effectively equivalent. “If I had seen the differences in the two series,” he says, “I would have written the piece differently. Mea Culpa.” In a corrective article posted Tuesday on the Hoover website <hoover.org/research/rec…, Ohanian makes public his mea culpa, but also reiterates a point he made in the original article, which is that California’s job growth is weakening… <latimes.com/business/st…>

And put me down as not impressed by the claim that “California’s job growth is weakening”: national job growth is weakening because the Federal Reserve wants job growth to weaken. Relative to the national average, the California unemployment rate today is where it was in 2014, higher than it was in 2019, and lower than it was in 2021. There is no signal here of the effects of recent policy changes here, and it is false to claim that there is.