How useful is the new stimulus data? | Unearthed

Last week, the White House released what they said was the government’s first release of stimulus data – eight monthly reports on the $787bn package they rolled out last February. This is in line

Last week, the White House released what they said was the government’s first release of stimulus data – eight monthly reports on the $787bn package they rolled out last February. This is in line with a long-standing promise to release stimulus reports and is likely just a start, with more data to come in July and then a total release later this year.

Some of the reports have already been eagerly awaited. The Census Bureau released its first batch of figures from the American Community Survey (ACS), which supplements surveys of 10,000 households with information about more than 100m Americans. This is the first year the Census Bureau will begin to run a ACS instead of following the traditional method of asking a “general health question”. The results are meant to provide more precise information on differences across neighbourhoods.

But the administration had to delay release of this information. Officials had to investigate the allegation that there were serious computer problems with the ACS survey in some states that disqualified hundreds of thousands of households from being counted.

The data releases have also raised eyebrows because there is no good way to filter out what might be a distortion in response rates. For example, the ACS report has found that between December 2008 and January 2009 there was a more than 10% response rate on the sample of complete census responses.

Democrats will, of course, characterise this as a disproportional response rate on one survey. Republicans will use the findings to suggest that the administration has undercounted Democrats in recent months.

So how useful are the data? Here are a few reasons to be optimistic about the new data and a few reasons to be sceptical.

The positive aspects

• The report released last week also showed economic growth in January, which was the first positive print in almost two years.

• In addition, the release showed positive economic data from the month of February, including job growth, consumer spending and a rise in business investment.

• Third, as president Obama said in his press conference last Thursday, “these reports finally provide the public with the statistical and financial information on which our future economic prosperity depends”.

The negative aspects

• The lack of a minimum threshold when it comes to statistical samples is a major flaw. We now know that the sample sizes that went into the analysis are far lower than the actual responses and the Obama administration has admitted that the errors in the results could be substantial.

• As I have argued in previous posts, the success of the ACS as a measure of things like actual poverty is being misrepresented. Instead of looking at the new method of asking for the income a person earned rather than just stating what a person’s basic needs were, there is some worry the ACS may be undercounting poor people – a fear that has made them call for a boycott of the survey.

• The reports do not show whether the information they have collected could cause a measurable difference in the country’s economy.

• The results from January appear to have undercounted younger black men. The number of unemployed black men in their 20s increased by 150,000 in February, while the unemployment rate actually increased. The report puts the reason for this at choice in employment. Another official explanation is that young black men now lose unemployment benefits in May, meaning they are not considered sufficiently unemployed to qualify.

With no clear standards for when the results have to be released and the new survey methodology reducing accuracy, it is difficult to say the new reports will improve how we measure poverty or help us avoid economic downturns in the future.

But the release is a positive step towards transparent and comprehensive government.

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