SoylentNews is people
SoylentNews
Bloomberg reports:
The way some parts of U.S. gross domestic product (GDP) are calculated are about to change in the wake of the debate over persistently depressed first-quarter growth.
In a blog post published Friday, the Bureau of Economic Analysis listed a series of alterations it will make in seasonally adjusting data used to calculate economic growth. The changes will be implemented with the release of the initial second-quarter GDP estimate on July 30, the BEA said.
Although the agency adjusts its figures for seasonal variations, growth in any given first quarter still tends to be weaker than in the remaining three, economists have found, a sign there may be some bias in the data. It's a phenomenon economists call "residual seasonality."
ZeroHedge reports:
In other words, as of July 30, the Q1 GDP which will have seen its final print at -1% or worse, will be revised to roughly +1.8%, just to give the Fed the "credibility" to proceed with a September rate hike which means we can now safely assume not even the Fed will launch a "hiking cycle" at a time when the first half GDP will print negative (assuming the Atlanta Fed's 0.7% Q2 GDP estimate is even modestly accurate).
Will abnormally "good" data be revised lower, or whether labor market data, which is already manipulated beyond comparison by the BLS will also be adjusted due to "residual seasonality"? Don't hold your breath.
(Score: 4, Insightful) by frojack on Monday May 25 2015, @08:44AM
Yeah, I pretty much agree. Any rational story that comes from that site is bound to be a some sort of troll. But if it sounds over the top leftist corporate hate rage, you can bet it will pop up here on SN the minute gewg_ wakes up.
GDP calc is noe and has not been consistent over the decades. It sll just a huge estimator, of very little scientific rigor, used to answer questions that are largely un-answerable (How is the economy doing?) from people that don't want to even look at how that particular sausage is made. Even for a country the size of Great Britain or France, this is an unanswerable question.
Tweaking the formula to allow for (hide) seasonality is just another layer of guesswork, on a foundation of incomplete measurements. And for what?
Making decisions later in the year? Adjusting the way you compute it so that numbers come out similar to later quarter if all other things were equal sort of ignores the fact that all things aren't equal.
There is a lot of production that just can't happen in the winter.
No, you are mistaken. I've always had this sig.
(Score: 2) by VLM on Monday May 25 2015, @11:57AM
There is a lot of production that just can't happen in the winter.
also demand destruction from holiday buying binges, legendary low real estate sales in the winter leading to low demand for everything housing related so even if you can build houses (like in the deep south) there's no demand at that time of year. "naturally" production will be lower because of demand slump unless the producer is trying to build up an inventory (LOL just in time).
(Score: 2) by Reziac on Tuesday May 26 2015, @02:29AM
Sounds more like cooking the books to me... things don't look so rosy, so lets find a way to make it look better, just like when services got added to GDP some years back, despite that services are a cost that doesn't create anything.
And there is no Alkibiades to come back and save us from ourselves.