Steep drop in unemployment rate spawns conspiracy

Conspiracy theorists cameout in force after the government reported a sudden drop in the U.S.unemployment rate one month before Election Day. Their message: The Obamaadministration would do anything to ensure a November victory, includingmanipulating unemployment data.

The conspiracy was widely rejected.Officials at the Labor Department said the jobs figures are calculated byhighly trained government employees without any political interference.Democrats and even some Republicans said they also found the chargesimplausible.

Yet that didn't stop the chatter. Theallegations were a measure of how politicized the monthly unemployment reporthas become near the end of a campaign that has focused on the economy and jobs.

The conspiracy erupted after formerGeneral Electric CEO Jack Welch, a Republican, tweeted his skepticism fiveminutes after the Labor Department announced that the unemployment rate hadfallen to 7.8 percent in September from 8.1 percent the month before.

"Unbelievable jobs numbers..theseChicago guys will do anything..can't debate so change numbers," Welchtweeted, referring to the site of Obama campaign headquarters.

The drop in unemployment was announcedtwo days after Obama's lackluster performance in his first debate withRepublican challenger Mitt Romney.

Republican Rep. Allen West of Floridasoon announced via Facebook that he agreed with Welch.

"Somehow by manipulation of data weare all of a sudden below 8 percent unemployment, a month from the presidentialelection," West wrote. "This is Orwellian to say the least."

The Obama administration wasn't givenmuch time to gloat about the strong economic improvement. Instead, it had todefend statisticians and economists against accusations made without anysupporting evidence.

"No serious person ... would makeclaims like that," said Alan Krueger, chairman of the White House Councilof Economic Advisers.

The jobs report is prepared under tightsecurity each month by a relatively obscure government agency — the Bureau ofLabor Statistics — without any oversight or input from the White House. It isbased on data collected by an army of census workers, who interview Americansin 60,000 households by telephone or door-to-door.

Eight days before the unemployment rateis made public, the bureau's office suite goes into lockdown. Tom Nardone, a36-year veteran at the agency who oversees preparation of the report, keepscrucial papers in a safe in his office.

A big reason for the security hasnothing to do with politics. The data could move financial markets if it werereleased early.

"These are our best-trained andbest-skilled individuals," Labor Secretary Hilda Solis said on CNBC. Shecalled the claims of manipulation "ludicrous."

The BLS, the statistical division of theLabor Department, collected and analyzed data and calculated the unemploymentrate before Wednesday night's presidential debate.

Joel Naroff, president of NaroffEconomic Advisors, said that it's "not that unusual" for the rate tomove by three-tenths of a percent in one month. It's happened 12 times in thepast 10 years.

"In other words, at least once ayear, you should expect that large a move," he said in an email toclients. It last happened 20 months ago, "so we were overdue. That is justthe reality of the data."

Romney didn't discredit the governmentdata. But plenty of conservatives did that work for him.

Conn Carroll, an editorial writer at theWashington Examiner, tweeted: "I don't think BLS cooked numbers. I think abunch of Dems lied about getting jobs. That would have same effect."

Rick Manning, communications director ofAmericans for Limited Government and the former public affairs chief of staffat the Labor Department, said "anyone who takes this unemployment reportserious is either naive or a paid Obama campaign adviser."

Rep. Paul Broun, a Georgia Republican,weighed in with a statement saying the report "raises questions for me,and frankly it should be raising eyebrows for people across the country."

Economists offered more plausiblereasons for skepticism. A big chunk of the increase in employed Americans camefrom those who had to settle for part-time work: 582,000 more people reportedthat they were working part-time last month but wanted full-time jobs.

Conspiracy theories are nothing new forObama. He has been dogged by discredited claims that he wasn't born in thiscountry and that he is Muslim.

"Stop with the dumb conspiracytheories. Good grief," Tony Fratto, who worked for President George W.Bush, weighed in on Twitter.

It wasn't just the political elite commenting.Angelia Levy, a researcher at the Federal Judicial Center, the research arm ofthe federal judiciary, told her 588 Twitter followers that Welch's commentswere "unbelievable."

"All of the sudden they'requestioning this data that's been reported for decades," the Democrat saidin a phone interview. "It's so hypocritical and ridiculous."

Justin Wolfers, a professor of business and public policy atthe University of Pennsylvania's Wharton School and research associate at theNational Bureau of Economic Research, went on Twitter to say Welch "justlabeled himself an idiot."

In a follow-up phone call, Wolfers saidthe economists who calculate the monthly jobs report "are nerds who spendtheir lives crunching numbers for the public service. To impute their integrityis outrageous."

The agency has been in the politicalglare before.

In 1971, President Nixon took aim at itafter a top official, Howard Goldstein, publicly attributed a steep drop inunemployment to largely technical factors. The administration reorganized theagency and installed several officials in newly created positions. That led tocharges from Democrats that the Republican administration was politicizing thebureau.

Welch said later in the day in a FoxNews interview: "I don't know what the right number is, but I'll tell you,these numbers don't smell right when you think about where the economy is rightnow."

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