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On June 1, Spanish prime minister Mariano Rajoy Promised Encouraging Jobless Figures.
Employment Improvement Seasonal Mirage
The results are in and Eurointelligence reports Encouraging Figures Nothing But a Seasonal Mirage.
The Spanish government can hardly contain its glee over seasonal (un)employment improvementsReasonably Valid Comparisons
Spain's Social Security administration released its May data on registered employment and unemployment, which PM Mariano Rajoy had anticipated over the weekend would be "encouraging". In comparison with April the headline figures were 98,000 fewer registered unemployed, and 135,000 more registered workers, reports El Economista.
However, stripped of seasonal effects the data are much less impressive. Corrected for seasonality, registered unemployment decreased by all of 265 people. On a year-on-year basis, registered unemployment grew by 177,000. The government has embarked on a campaign to paint the data as evidence of the start of the economic recovery and proof that the government's economic reforms, notably its easing of dismissal rules, are working to create jobs. To be fair, the reduction in registered unemployment in May is typically half the size observed this month.
Here are a couple of reasonably valid statistical comparisons.
- This time period vs. the same time period in prior years
- Continual seasonally adjusted number comparisons
Each method has its proponents.
What every economist on the planet would correctly object to making non-seasonally adjusted short-term comparisons, just like Rajoy did.
Mike "Mish" Shedlock