Wires

Ex-GE CEO Welch sets Twitter on fire with jab at Obama on jobs

* Welch suggests data an attempt to recover from debate

* White House slams Welch tweet as "ludicrous"

* Investors point to his "black box" past with GE Capital

By Scott Malone and Lucia Mutikani

BOSTON/WASHINGTON, Oct 5 (Reuters) - Jack Welch, thelionized former chairman of General Electric Co , provokedcries of outrage in Washington on Friday when he appeared toaccuse the White House of manipulating September job figures forpolitical gains.

White House officials dismissed as "ludicrous" a tweet Welchsent to his more than 1.3 million followers that suggested U.S.President Barack Obama's administration rigged the data as a wayof recovering from a poor Wednesday night showing in a debateagainst Mitt Romney, his Republican challenger for the WhiteHouse.

"Unbelievable jobs numbers..these Chicago guys will doanything..can't debate so change numbers," Welch said in aposting on Twitter, apparently referring to Obama, who formerlyserved as a senator from Illinois.

The tweet was repeated more than 2,000 times, with manymocking posts comparing Welch to New York real estate tycoonDonald Trump - who during his failed bid for the presidencyloudly argued that Obama was not born in the United States - andClint Eastwood, who gave a widely panned speech to an emptychair at the Republican National Convention in August.

Officials in Washington quickly dismissed the idea that theLabor Department report - which showed U.S. unemployment fallingto a four-year low of 7.8 percent - could be rigged.

"That's a ludicrous comment. No serious person believes thatthe bureau of labor statistics manipulates its statistics," saidAlan Krueger, chairman of the White House Council of EconomicAdvisers. "The jobs report and all of their other statistics areprepared by career employees. They use the same process everymonth. They use the same process for Republican and Democraticadministrations."

The tweet was by no means Welch's first criticism of Obamaon his Twitter feed, where he has regularly spoken out in favorof Romney, as well as weighing in on sports. During thepresidential debate in Denver, Colorado, on Wednesday night,Welch tweeted: "HOW can anyone vote for Obama after thisperformance..he has demonstrated his incompetence."

MEMORIES OF THE "BLACK BOX"

Welch's comments drew particular fire from the financialcommunity since during his 20-year tenure as GE CEO, which endedin 2001, he was accused of using the GE Capital finance unit asa "black box" where he could quickly sell assets such as realestate to ensure that the largest U.S. conglomerate regularlybeat Wall Street profit estimates by a penny.

"This guy is the guy that's telling me the books are cooked?That's hilarious," said Barry Ritholtz, CEO and director ofequity research at Fusion IQ in New York, which manages about$300 million in assets. Ritholtz was one of the first to respondto Welch's tweet.

Other tweets agreed with Welch's assertion. Welch is afrequent participant on the site and has more than 1.3 millionfollowers.

"In regards to today's Jobs report---I agree with former GECEO Jack Welch, Chicago style politics is at work here," saidFlorida Representative Allen West, a Republican, on Twitter.

GE Capital grew to generate about half of the Fairfield,Connecticut-based company's earnings under Welch. But theoperation's vulnerabilities became all too clear during thefinancial crisis, when losses at GE Capital hammered thecompany's earnings and sent its stock below $6.

Welch's successor Jeff Immelt, who has been working to scaleback GE Capital and make it less volatile, serves as top adviserto the Obama administration on jobs and the economy. GEofficials declined to comment on Welch's words.

Welch, who with his wife Suzy Welch, writes a column forReuters, could not be reached to comment further on his view.

BLS DEFENDS METHODS

Officials with the Bureau of Labor Statistics defended theirmethods and findings.

"We have done a monthly survey since 1940 and the methodshave broadly not changed," said Karen Kosanovich, an economistwith the bureau. "Fiddling with the numbers, I don't know howthat would be possible."

U.S. Labor Secretary Hilda Solis told CNBC television thatshe was "insulted" by the remark.

Other economists said they regarded the idea that themonthly data - which is widely watched by Wall Street,particularly in the face of the United States' slow recovery -could be rigged as strange.

"Because we lost two-tenths (of a percentage point) lasttime and three-tenths this time, the conspiracy theorists wouldcontend the BLS is cooking the numbers," said Ray Stone, aneconomist with Stone & McCarthy Research Associates inPrinceton, New Jersey. "This just isn't true. They don't dothat."

(Additional reporting by Aaron Pressman. Editing by AndreGrenon)

((scott.malone@thomsonreuters.com)(+1 617 856 4342)(ReutersMessaging: scott.malone.thomsonreuters.com@reuters.net))

Keywords: USA ECONOMY/JACKWELCH