Fake News on Germany's Unemployment Rate at the NYT

January 03, 2017

Alright, that is not entirely fair, but when the NYT told readers that Germany’s unemployment rate is 6.0 percent it seriously misled readers. The issue is that this figure refers to Germany’s unemployment rate as calculated by Germany’s government. This measure counts workers who are employed part-time, but want full-time jobs, as being unemployed. By contrast, the standard measure of the unemployment rate in the United States counts these workers as being employed.

This would be reasonable if the German government measure was the only one available, but it isn’t. The OECD calculates a harmonized unemployment rate that is essentially the same as the unemployment rate generally used for the United States. By this measure Germany’s unemployment rate is just 4.0 percent. 

The NYT can be partially forgiven since this was a Reuters story that it made available on its web site. (I don’t know if it ran in the print edition.) Still, it would not be hard to add a sentence either explaining the difference or alternatively including the OECD measure.

In this same vein, and it’s a new year, let me also harp on the practice of printing other country’s growth rates as quarterly figures. While the rate of GDP growth is always expressed as an annual rate in the United States, most other countries express their growth as a quarterly rate. Typically this raises the U.S. growth rate by a factor of four. For example, a 0.5 percent quarterly growth rate translates into a 2.0 percent annual rate. (To be precise, the growth rate should be taken to the fourth power. For low growth rates this will typically be the same as multiplying by four.)

Anyhow, articles often appear in the NYT and elsewhere that just print the growth rate as a quarterly rate, frequently without even pointing out that it is a quarterly rate. This gives readers an inaccurate impression of the growth rate in other countries.

It really should not be too much to expect a newspaper to convert the growth rates to annualized rates. After all, the reporters are more likely to have the time to do this than the readers. And, this is supposed to be about providing information to readers, right?

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