Percentage Point vs. Percentage Confusion

A politician announces: 'We reduced unemployment by 20%.' Unemployment fell from 10% to 8%. That is a 2 percentage point reduction — but a 20% relative reduction of the rate. Journalists report '20% reduction' without clarification; most readers understand this as unemployment falling to 8% from something much higher.

A bank advertises: 'We're raising savings rates by 50%!' The rate goes from 0.2% APY to 0.3% APY. The relative increase is 50%. The absolute increase is 0.1 percentage points — a trivial change in the actual return on savings. The relative number is technically correct and deeply misleading.

An epidemiologist reports vaccine efficacy as a '90% reduction in infection.' A critic argues: 'The actual improvement is only 9 percentage points — it went from 10% infection rate to 1%.' Both are right. The confusion between the two framings drives entirely different public perceptions of the vaccine's value.