There it is again. Another news report on the economy that prefaces the news with the word 'unexpected'.

WASHINGTON (Dow Jones)--The U.S. unemployment rate unexpectedly declined in January, but the economy continued to shed jobs and revisions painted a bleaker picture for 2009, casting doubt over the labor market's strength

Almost at the same instance, the erstwhile Goldman-Sachs (now just Goldman) had this to say about the umemployment figures.

Goldman is known for changing its estimates within 24 hours of an NFP number. Today, there is no change, and it stays at -25,000, coupled with an estimation of the unemployment rate at 10.1%.

So what's going on here?

Screwing around with unemployment statistics is a time-honored practice--for Democrat administrations.

Up until the Clinton administration, a discouraged worker was one who was willing, able and ready to work but had given up looking because there were no jobs to be had. The Clinton administration dismissed to the non-reporting netherworld about five million discouraged workers who had been so categorized for more than a year. As of July 2004, the less-than-a-year discouraged workers total 504,000. Adding in the netherworld takes the unemployment rate up to about 12.5%.

The Clinton administration also reduced monthly household sampling from 60,000 to about 50,000, eliminating significant surveying in the inner cities. Despite claims of corrective statistical adjustments, reported unemployment among people of color declined sharply, and the piggybacked poverty survey showed a remarkable reversal in decades of worsening poverty trends.

Somehow, the Clinton administration successfully set into motion reestablishing the full 60,000 survey for the benefit of the current Bush administration's monthly household survey.

I'm not saying this is happening now, and in any event, no one would tell us until it was politically safe to do so (and then the story would be buried as irrelevant).

I'm going to make a prediction though--the media will very soon, start reporting the payroll survey rather than the household survey. Why? A million census workers will be going to work in the next few weeks, and their payroll is going to have the 'right' effect on the job numbers. Obama will hold a press conference and announce the government hyper-spending is working--the economy is turning around! Of course, when the census is completed, those people will be out of a job, and the numbers will revert to a more normative characterization of what's happening in the economy.

As for this latest report on the household survey, it's interesting that even though its a poll, its not reported the way polls traditionally are--with a statement of confidence level (i.e. 95%) and a margin of error. For a sample the size described by the Bureau of Labor Statistics, the confidence level would normally be around 98% and the margin of error about +/- 0.25%. The implications of that are sobering for those that are hoping that things are turning around--the change is within the margin of error, and Goldman is probably right--we still have 10.1% unemployment.