The preliminary revisions to Q4 2013 GDP subtracted a significant portion off what was previously believed much more robust, thus making Q3 more and more of an outlier. We knew that 2013 (and even late 2012) had a very heavy inventory component, far more than is “typical”, and that observation survived these adjustments despite a similar downward revision in Q4 [...]
So Q2 GDP wasn’t a complete disaster; that was left for Q1. Even at 1.7% (intangibles and imputations everywhere) the string of GDP fragility is deafening, particularly in the face of the combined psychology of QE 3 & 4. Since Q2 2012 was revised significantly higher, I can no longer officially proclaim that GDP growth has been at or under [...]
Seasonal adjustments have legitimate use only when there is a recognizable and relatively unbroken patterning in a data series. But most statistical agencies and their collection methods do not or cannot process structural changes. They adjust their benchmarks via the calendar, regardless of what happens in the intervening years. That presents a large problem for seasonal adjustments and statistical estimates [...]
Chairman Bernanke stole the show yesterday, certainly by his accommodative and now contradictory stand. I suppose that is the danger in trying to talk “markets” toward “targets”, much like Greenspan in the late 1990’s. Toward that end, he made at least one prediction that will likely come true (in sharp contrast to the Fed’s history), namely that the unemployment rate [...]
On March 28, 1997, the Bureau of Economic Research downgraded economic growth estimates for the fourth quarter of 1996. Over the course of the two months between the advance estimate, preliminary estimate and final estimate, the BEA reduced GDP by a rather large 0.9%. The reduction in GDP then was similar in absolute size to the current revisions to Q1 [...]
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