Harold Macmillan was Chancellor of the Exchequer for one year in 1956. Although the budget speech he delivered was a fairly tepid bit of Keynesian tinkering (famous, almost, for introducing Premium Bonds) it did contain some wisdom about the usefulness of economic data:
…some of our statistics are too late to be as useful as they ought to be. We are always, as it were, looking up a train in last year's Bradshaw [train timetable].
When it comes to the unemployment figures, this is always worth remembering. There is a lag between the event and the data; when you see a politician on the news the day that new figures are released trying to blame the latest crises in the Eurozone, it’s a lie. Causes in an economy persist; some are latent for a long time, other become apparent more quickly.
Likewise, people who quote data from a certain period in order to show correlations or connections are not to be trusted. When assessing Thatcher’s economic performance, people often look at the GDP growth figures from 1982/3 – 1988/89, and it is an impressive array; but when you factor in the recession that occurred in 1908/1981 the average takes a downward turn. This is also true when you factor in the recession at the end of Thatcher’s time in office.
A great example of the misuse of statistics in current debate is executive pay. As Allister Heath points out, it is often forgotten that current pay rises relate to the performance of the company in the previous financial year, not the current one. This is a trap that MigrationWatch has fallen into. Yesterday they claimed that there was a correlation between rising youth unemployment and rising EU A8-country immigration. They further said that if there wasn’t a causative link between rising immigration and rising youth unemployment it would be a “remarkable coincidence”.