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Is The Economy Stronger In May 2015  Essay

Economy Stats The economic statistics cited by Patricia Cohen are meant to put a positive spin on an otherwise doubly-seasonally adjusted economy still limping under the Federal Reserve's guidance and policy of quantitative easing. Cohen calls it "strong job growth data," but there are scores of other stats that researchers use to indicate just the opposite, such as the correlative study of Labor Force Participation Rate and People not in the Labor Force by Durden (2015). Cohen's study is meant to put a good face on an otherwise grim economic outlook, and this paper will show how she does it.

Statistical Procedures Mentioned in the Study

There are no statistical procedures clearly delineated in the study by Cohen; however, it is evident that Cohen uses a number of procedures in order to present her findings. For example, Cohen uses correlations and ANOVA statistical analysis in order to arrive at her conclusion that, indeed, the economy is looking stronger. One correlation study that she uses is the relationship between higher wages being offered and an increase in jobs by 280,000 for May 2015. Cohen argues that the increase in wages may be what has led more people into the workplace: "Hourly wages…rose 0.3% last month, possibly helping to lure back some discouraged workers who had been staying on the sidelines" (Cohen, 2015). The argument is a dubious one that is based on nothing other than a supposed correlation and an apparent desire to see something positive in the latest round of economic data. Cohen ignores other possible correlation studies and even accepts the data generated by the Bureau of Labor Statistics (BLS) as authentic without questioning them or authenticating them on her own. This level of research is unacceptable for a serious level of analysis and therefore throws suspicion...

Again, Cohen relies on the BLS to show that the unemployment rate has decreased over the past year and that the labor force has increased. She juxtaposes these findings with demographics of unemployment, showing that for each demographic unemployment has decreased over the past year. She also includes percentage increases in type of work and average weekly earnings to support her argument that the economy does appear to be looking stronger. She also cites the positive opinions of persons like James Bullard of the St. Louis Fed in order to criticize the anxiety of the IMF, which has suggested that the Fed should not raise rates this year because the economy has not yet stabilized and sufficiently turned around.
Conclusions

Cohen concludes that while the economy may be looking better there are still some signs that need to be displayed in order for recovery to be clearly on course. One of those signs is when employers "convert their temporary hires into permanent workers" (Cohen, 2015). When that happens along with a much larger increase in labor participation rates, the economy will be safely on its way to prerecession times of plenty and prosperity.

Appropriateness of the Conclusions

The appropriateness of Cohen's conclusions is lacking mainly because her conclusions are based primarily upon what analysts say rather than the economic data and the statistical analysis. She takes one encouraging sign and turns it into a launching point for how the economy is looking better now than it was last month or last year. However, what she leaves out is a score of other…

Sources used in this document:
References

Cohen, P. (2015). Strong Job Growth Data Eases Concerns After Winter Dip in Economy. New York Times. Retrieved from http://www.nytimes.com/2015/06/06/business/economy/jobs-report-hiring-unemployment-may.html?_r=0

Durden, T. (2015). Where the May Jobs Were: Teachers, Waiters, Retail, and Temp

Help. ZeroHedge. Retrieved from http://www.zerohedge.com/news/2015-06-05/where-may-jobs-were-teachers-waiters-retail-and-temp-help

Snider, J. (2015). Payroll Stats Become Even More Implausible. Alhambra Investment
Partners. Retrieved from http://www.alhambrapartners.com/2015/06/04/payroll-stats-become-even-more-implausible/
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