Revised data released today showed that job losses in December 2008 were revised upward to 681,000 people. It was reported on ABC World News Tonight as the largest single-month job loss since 1949. This is true if you look in nominal terms — just looking at the actual amount. But in terms of “real” numbers, it’s not even close. Nominal values are current values, using current prices and economic conditions; real values adjust for inflation and the size of the economy. To understand the difference, go here. Look up the top 10 grossing movies of all time and you will find only one made before 1990: Star Wars. But click on the “All Time U.S. Adjusted Box Office” and you’ll see the top grossing movies of all time in real terms, adjusting for changes in ticket prices due to inflation; you will only find one movie made after 1990 on that list: Titanic. Last year, The Dark Knight became the second highest grossing movie ever. but in real terms it ranks 23rd. Economists usually say that you should make judgments based on real terms, not nominal ones.

If you are going to compare 2008 to 1949, you have to adjust for population size. Back in 1949, the US population was around 150 million, roughly half what it is today. And our labor force participation rate is even higher now, so our labor force is even more than double what it was back then. So 681,000 jobs lost today is less than half the equivalent number of jobs lost in 1949.

Virtually none of the numbers you will see in the media are in “real” terms, adjusting for price changes or population changes. Why not? Because significant changes in economic variables (high oil prices, large job losses, stock market dips) are what make news. Charlie Gibson wants to report a record job loss or the worst spike in gas prices ever. That’s good television news. He doesn’t want to tell you that the aforementioned record job loss is actually about half (in real terms) the job loss in 1949 because that weakens his story. Putting economic data in perspective so that people understand what it really means? That’s not Charlie Gibson’s job. That’s my job.