Does the Government Manipulate Data to Make It Look Good for Them?

A few weeks ago I received this email from Suzanne: Hi George. I read your blogs every week. Don’t you think the government manipulates the data to make it look good for them?

It’s an interesting question, and one I think about a lot. That said, I don’t believe the government is the culprit. While I don’t doubt they might choose to manipulate the data if they could, the good thing about data is that it’s objective, not subjective. But how that data is reported matters, and in the past few decades we’ve seen a major shift in both what the media reports and how they report it. Here’s an example:

In April, the US economy added 160,000 jobs, and the unemployment rate held steady at 5%. What’s the bumper-sticker headline? “US employment slows as only 160,000 jobs added in April.” But when you dig into the facts (which I consider to be part of my job), the slowdown isn’t much of news item. Why? Because the economy is finally approaching “full employment.” This means that nearly everyone who is willing to work and looking for a job has one. The unemployment rate is near an 8-year low, so it’s not expected to dip much further from its current level. And since the pool of unemployed workers is shrinking, job gains are also expected to slow down . But, of course, none of these important facts make a slick headline.

And sometimes the media simply distorts the meaning of the facts.

A headline in TheWall Street Journal last week read Balance Due: Credit-Card Debt Nears $1 Trillion as Banks Push Plastic . What an interesting take on some basic data. The following chart illustrates the increase in household liabilities that is covered in the article, but from my perspective the data tells a different story: one of healthy growth in consumer spending and a reasonable expansion of consumer debt as we emerge from the depths of the Great Recession.

Despite the Journal’s headline, debt in and of itself isn’t a bad thing. Even more, the increase in debt is more likely the result of historically low interest rates and increased consumer confidence than of banks “pushing” anything. In the face of the increase, the important question to ask is whether consumers have the ability to pay off new debt. The answer: they can and they are. Wages are up overall. Not average or median wages (which is what the media talks about) but total income, which supports this higher level of spending. That’s why consumer debt increasing is not a real problem—despite the implication by the media.

Then there’s this headline: America’s Retail Stores Continue to Fail . But this next chart shows the real story: an increase in Internet sales and a decrease in department store sales.

The truth is that every dollar we spend online has legs, distributing its way into the economy just as much as department store sales did back in the “old days.” Where we shop is changing. My parents bought most of what we needed at Sears and the A&P store. Today, the go-to standard is Amazon.com . Patterns change, and with that change there are winners and losers. Yes, it may be tough for our minds to adjust to the shift, but the bottom line is that the media often doesn’t tell the whole story.

If I had it my way, the headlines would always be rewritten to tell the truth instead of grab reader attention. Instead of using “Balance Due: Credit-Card Debt nears $1 Trillion as Banks Push Plastic” to not-so-subtly accuse those greedy bankers of twisting the consumers’ arms, I’d edit the headline to “Consumer spending is back to healthy pre-recession levels.” Their headline draws the emotion, but mine is just as accurate.Instead of writing that “The sum, close to the all-time peak of $1.02 Trillion…could signal an easing of frugal habits ingrained by the recession,” I’d rewrite it to say, “The sum tells us something great: consumers are finally comfortable spending again after the deepest recession of our times.”

Media bias is nothing new (remember my blog Headlines sell, but don’t let them mislead you! from way back in 2014?), but it seems to get worse every day. That’s why it’s so important to look closely at the data, consider the source, and come to your own conclusions. You may even try rewriting a headline or two to help uncover the real news rather than just reading the “story.”