by Jamie Hyndman, Mawer Investment Management
Last [last] Friday morning I was following my usual routine. On the drive into work between 6:30 and 7:00 am I listened to the Bloomberg business news on Sirius satellite radio. Then at 7:00 am sharp I switched over to a Canadian news station to find out what’s going on in our fair country. Finally, when I got into the office, I scanned the business headlines from a variety of daily emails I receive. While these various information channels normally fit together quite nicely, last Friday it was a comic disaster that laid bare the shortcomings of some business media.
I could wrap up this blog right now by saying that employment statistics are a lagging indicator and are therefore virtually useless. I could go one step further and say that monthly employment is such a short-term data point that it is completely useless. But that wouldn’t allow me the opportunity to share my story, which is as follows…
At 6:45 am Bloomberg reported the following: U.S. employers added 96,000 new jobs in August – fewer than forecast. Also negative was the fact that the unemployment rate dropped because more workers gave up trying to find a job.
At 7:00 am a Canadian broadcaster reported the following: U.S. employers added a healthy 96,000 jobs which drove the unemployment rate there down to 8.1%. In addition, Canadian employers created more jobs than expected at over 34,000.
At 7:10 am I went through an email from a Canadian brokerage firm and their analysis broke down the Canadian employment numbers into their component parts. It turns out that the 34,000 new jobs in Canada were formed by the creation of 46,000 part-time jobs and the loss of 12,000 full-time jobs – hardly a positive.
So the Canadian broadcaster got both the U.S. and Canadian analysis wrong. While I got a good chuckle out of this, it really is serious stuff. So much of what gets reported in the media is insignificant information. To compound the problem, much of it also gets incorrectly interpreted. When it comes to business media, caveat emptor. Be cautious, be critical or better yet, change the station.
Jamie Hyndman
Copyright © Mawer Investment Management
