New York Times' Adam Davidson Strikes Again, Tells Us to Ignore Downer Jobs Data and Trust the Confidence Fairy
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While Adam Davidson’s current New York
It’s hitting the point where I’m getting such sharp, annoyed commentary about Davidson’s columns by e-mail that I have to work to read his columns with a fresh eye. From one correspondent:
Can we make Adam Davidson disappear? He seems to have carved out a special niche: Stupid-nomics. WTF is his point here? That Adam Davidson is an oh-so-reasonable-guy-who-just-wants-the-silly-competing-economic-theories-to-get-along so we can all feel good? That jobs would magically appear if we would just stop paying attention to them?
His articles seem to be an experiment how somebody with either innate or willful ignorance of macroeconomics — but a superficial curiosity coupled with a desire to preserve and not jeopardize his paycheck –would view economic questions. His assumptions –i.e. if Greece could just pay off those debts and sell some good stuff all would be well — are so wildly simplistic and wrong-headed that it’s hard to go on to the next sentence, because you know you’re heading down a path led by somebody who is blind. And you smack your head against the wall. Where is the aspirin?
If you haven’t encountered Davidson’s latest offering, he starts with the claim that the monthly nonfarm payrolls release has become a key (his breathlessness implies THE) indicator of economic performance, and is now driving hiring decisions. Davidson tells us this is terrible because actually knowing roughly how many jobs are being added when the results aren’t great frightens employers into not adding them and consumers into not spending.
Based on this sort of thing, it looks as if Davidson lives in some sort of weird alternative reality of as he styles himself, “econonerds” which I imagine consists of heavily of economics-oriented journalists and analysts. This crowd is in the business of having to be out, quickly, with a take on new information. But just because their business is to attribute meaning to various data releases doesn’t mean they have this sort of news has same impact in the wider world as it does in the media hothouse or with quick-trigger investors.
First, nonfarm payrolls aren’t a “one number to rule them all” release. They are prefigured by ADP employment report, published just prior to the Friday BLS report. Normally they tell more or less the same story. But the ADP reported less awful job creation for May (133,000 v. 69,000 for the NFP). And more worrisome, the report indicted the average number of hours worked fell a smidge. And there are other reports that give fairly current economic readings, such as retail sales. And for prospective indicators, there are releases like the Factory Orders Report and the forward looking sub-indices (such as new orders) in the various manufacturing indices. Thus, contra Davidson, the stock