The disappointment from retail sales has been foretold by numerous other indications for months now. The idea that the economy would suddenly shoot higher after the “aberration” of the wintry first quarter was predicated almost exclusively on the mainstream interpretation of payrolls. For all that hope and optimism, it has never gone further than the BLS’ Current Employment Survey as [...]
One of the primary factors pulling down the economy in the first quarter was, of course, inventory. There had been an epic surge in the middle of last year that made it all the way to Christmastime, only to have anticipated consumer strength “mysteriously” never appear. But that actually creates a bit of a misconception, as with a lot of [...]
The term discontinuity is probably unfamiliar to the casual observer of economic accounts, but they are quite regular features in almost all the statistical data series. It goes with the territory, as statistical estimates themselves vary in depth and “quality.” For example, when the Census Bureau updates its population estimates to incorporate fuller or “better” samples or sample sizes, it [...]
In 1964, Milton Friedman suggested the economy behaved like a string set along a piece of wood on an upward slope. The string, hugging the underside of the wood, represented the economy moving along the track of potential (the piece of wood), rising with productivity (the upward slope, or trend). Occasionally, an external shock would “pluck” the string downward, representing [...]
This week’s retail sales report has been used over and over as “evidence” for the second half bounce that every economist and policymaker is expecting (and proclaiming without reservation). Without fail, there is no context accompanying the month-to-month focus on pseudo-precision designed into existence by statistical modeling. The trend continues to be, as it has been for over a year [...]
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