Friday, May 11, 2012
So it was that Aunty ABC woke me at 6am with the sombre news that Australia's unemployment rate was "expected to have jumped" in April - all the way from 5.2 to 5.3 per cent. Oh, the humanity.
My own inbuilt detector flashed red on hearing this headline. I spent 15 years reporting economic statistics and I have seen how the sausages are made. In fact, every economic journalist worth his or her salt knows the labour force report is a lottery and that a blindfolded orangutan tossing darts would be more accurate than the legions of market economists in calling the number.
But what bugged me about 'Aunty's' reporting of this forecast wasn't just its lack of knowledge of the quirks of monthly statistics. It was its apparent glee, or at least enthusiasm, in anticipating 'more bad news for the economy'. This was the second lead item on a morning bulletin on a day when there was much more important news to report on.
Sure enough, when the numbers hit the dealers' screens at 1130 eastern time, they didn't fit the story of the wheels falling off the economy. Instead, unemployment had fallen from 5.2 to 4.9 per cent, although we were now told by the ABC that while a 0.1 percentage point rise was a "jump", a 0.3 percentage point decline was a "slight fall".
Not only that, but the chosen lead on the story was "Unemployment Drops as Job Seekers Give Up". This was based on a 0.1 percentage point decline in the participation rate - which measures the proportion of the eligible workforce either in work or looking for work. The bureau's own website warns that these numbers are subject to sampling error. All it can say is that there is a 95% chance that the participation rate change is somewhere between -0.5 ppts to +0.3 ppts.
In any case, lots of factors can affect workforce participation. People can leave the labour force to go back to full-time study. Women can leave work to have and raise children; men to take over as full-time carers. And, of course, people can give up looking for work.
But to draw the conclusion that a 0.3 percentage point decline in unemployment over one month was entirely due to people throwing in the towel in the search for work is deluded at best and dishonest at worst. Month-to-month data is just NOISE and for the ABC to draw that negative inference based on very little at all raises questions about the integrity of its news service or at least the competence of its journalists.
This is particularly so when they had been leading all morning with the suggestion that an even smaller rise in unemployment would be a sign of economic weakness.
Even more incredibly, their own story quoted two bank economists as saying the numbers were actually positive. Yet the broadcaster's lead and the headline said the opposite. And this was despite a contrary response from the financial markets, which took the numbers as a positive signal for the economy - the sharemarket rallied, bonds sold off and the Australian dollar moved higher on the expectation the data reduced the chance of a rate cut. If the jobs data was giving a false signal, as the ABC was suggesting, why would we see that market response??
Then, a glutton for punishment, I turned on the radio driving home from work at 6pm only to hear ABC radio run this headline: "Unemployment IS EXPECTED to rise again after falling to a 12-month low in April." Expected to! Who says? The same ones predicting it would rise last month? Hadn't they learned their lesson? Why not just run the news straight and tell people what happened today without speculating on some imagined future event?
True to its very good reputation, the financial wire service Bloomberg managed it: "Australia's unemployment rate unexpectedly dropped to a one-year low in April as payrolls rose for a second straight month, driving the local currency higher and reducing bets on interest rate cuts next month." No arguments there. That's what happened. It's not really that hard to tell it straight.
So why can't the ABC do it? Why does it find it so hard to report news without putting an anti-government, or at least a glass-half-empty, spin on it? And why is every half-arsed line cranked out by the Opposition's media machine automatically deemed to be news? If you check with the OECD, Australia's unemployment rate is less than half that of the Euro zone, and is at least three percentage points below the jobless rates of the US, the UK and Canada. So how is a 4.9% unemployment result in a world still struggling to emerge from the biggest downturn since the 1930s a bad thing?
My hunch is that the paranoia about 'balance' within the public broadcaster has reached the point where just reporting the facts is no longer enough. What is required is the fabled "truthiness". One must not seek to simply portray economic news as "good" - or even as neutral - for fear that the nitpicking culture warriors who resent taxpayers money being spent on public broadcasting accuse them of bias. So ABC journos overcompensate by trying to spin straightforward facts to appease their imagined enemies. (Either that or they're auditioning for jobs at News Ltd).
Of course, you can imagine the ABC's response to all this. They'll issue their standard line that half their correspondence is from people accusing them of being dupes of the conservatives and the other from Tories accusing them of being a nest of leftists. And that must mean, they will inevitably say, that they've got 'the balance' right. One for him, one for her, stitch, stitch, purl like some 19th century knitting mantra.
My response is those arguments are just a cute way of deflecting criticism of what in essence is lousy journalism. So ABC, stop the spin, stop telling us what "is expected" to happen and just tell us what has happened. There is enough heavily spun news out there without you cranking it out as well. And trying bringing some global perspective to your reporting. Otherwise, we may as well sell you to Murdoch and be done with you.
Posted by Mr D at 12:07 AM