As fresh labor market numbers for November are set to hit the headlines, top economist Justin Wolfers is urging the public to read the data with extreme caution.

Shutdown’s ‘Echo Effect’

Wolfers warns that the recent government shutdown has created a statistical “deep fog” that is likely artificially inflating November's unemployment rate, making the economy look worse than it actually is.

According to Wolfers, the root of the problem is the cancellation of the October survey during the government shutdown. This gap in data collection has disrupted the delicate “4-8-4” rotation cycle used by the Bureau of Labor Statistics (BLS), where households are surveyed for four months, left alone for eight, and then surveyed again.

Because there was no survey in October, the composition of the November sample has been drastically altered. Typically, only one-eighth of the respondents are new to the survey.

However, Wolfers points out that in the November sample, there are “twice as many inexperienced respondents” as usual—roughly 25% of the total pool.

Word for the day: Rotation group bias. = Labor market survey responses differ when ...