Along with this morning’s atrocious retail sales report comes more bad news for economic statistics that have been at least clinging to the recovery narrative. My biggest complaint with the Establishment Survey is that I believe the BLS in constructing their measure of variability has been overly optimistic in its trend-cycle component. In the 1960’s and especially the 1970’s, economic [...]
I think the ongoing destruction in the Japanese Household sector demonstrates very well a specific shortcoming about economic statistics like GDP. The basic calculation of the particular measure that forms the headlines of almost all commentary is a comparison of the current quarter to the previous one. That right away opens the door to incongruities as there remain very definite [...]
For statistics like GDP, what is most important is relative comparison between the most recent quarters (or years). That narrow view misses a lot of important context, an aching factor when structural or longer-term defects in actual economic function drag on long past the points of tapered comparison. In that way, by only measuring the most recent relativity these statistics [...]
Like the initial or preliminary GDP report in Japan for Q3, the first revision caught almost every economist totally the wrong way. Expectations were for upward re-figuring which should have been taken as a contrarian signal. And sure enough, December’s revisions to Q3 GDP were in the opposite direction as expected, and for all the reasons that economists are “experts” [...]
Despite any intent, the revisions to wages and real incomes that I highlighted yesterday actually go a long way toward providing an explanation for other “aberrations” that still exist. The primary problem I have with accepting the mainstream version of economic events, particularly that of the Establishment Survey, is that the labor force is still shrinking, or at least barely [...]
Statistics are notorious for being worse than liars, according to cliché, but under many circumstances there is more than an element of truth to that. The latest revisions to the July revisions are not quite the liars’ paradox (everything I say is a lie; that first statement is true) but there is something amiss that is missed in the narrow [...]
Following up with some more detail on yesterday’s GDP euphoria, a closer examination reveals that not much has changed beneath the headline refiguring. Again, I highly doubt the 3.9% (plus some rounding) survives further estimations, but that really doesn’t much matter at this point. Whether it ultimately arrives at 5% or 2% won’t change the trends that are embedded beneath [...]
One of the major benefits to rewriting history, and “moving” growth from 2011 and 2012 into 2013, is that Bernanke’s QE3 & 4 scorecard looks a hell of a lot better. Unfortunately, it still isn’t enough of an inventory change to show acceleration, but it is, supposedly, far less of a direct abomination. Click here to sign up for our [...]
While commentary has already taken off with the latest GDP estimate, given recent history I am fully confident that GDP growth will not be 4%. What is taking place in the statistical bureaus is nothing like what we have ever seen before. The constant revisions, and major changes at that, can only have a deleterious effect on trust in accuracy. [...]
Now that the second quarter has concluded we will start getting the full picture (before revisions, of course) of the warm weather. So far initially “economists” have been cutting back their forecasts, though at least this time it is ahead of “unexpected” declines in economic fortunes. Below is a summary of where expectations sit now, though since these are nothing [...]
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