In times of economic stress, people will often look more often than usual to statistics. Uncertainty drives us to search more intently for clues that may help us sail through difficult times without too many bruises. In such times, stats may also prove less reliable, more difficult to interpret, and often both.
Let us start by stating a few facts and what they imply. The casino sector crash is extreme and has an equally visible impact on GDP, which is dropping in ways possibly never seen before. Behind the trends, several processes are working in tandem and feeding each other. Less production means less income and, therefore, less expenditure. As families spend less, businesses invest and produce less, and more people become unemployed or see their work-related income decrease – and so on. That is the look of a contraction spiral. The other main economic actor, the government, has some slack to counter these trends, but its power is more limited than often presumed.
There are some, admittedly faint signs of a path to recovery, but the movement is excruciatingly slow there. Further, some statistics we need to make sense of it all seem a bit off. They do not make much sense or conflict with other information sources. Some stat-collection and reporting mechanisms are possibly in need of a careful review.
A few examples will illustrate what I mean. Remember, the economy has contracted by more than a half in the first semester (and falling), and casino revenues were, in the second quarter, just about one-twentieth of what they were in 2019. And yet, compared with the end of the year, there are only about 4,600 additional unemployed workers and 11,800 under-employed. Taken together, they represent less than 5 percent of the labor force.
Then, look at the working income. The severe contraction of the economy notwithstanding, the median wages have barely budged. If we take the figures at face value, the overall monthly median went down by a mere six percent. And in the sectors more directly affected by tourism and gambling activities, they do not even show that. There was no change at all in hotels and restaurants, a mere drop of 200 patacas in gambling, and a ‘whooping’ loss of 700 patacas in commerce.
Maybe there are delays in reporting or processing, but these comparatively ‘bright’ figures are implausible. They cannot hold.