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: 3, Interesting) by Non Sequor on Monday May 25 2015, @01:36PM
ShadowStats is garbage.
http://azizonomics.com/2013/06/01/the-trouble-with-shadowstats/ [azizonomics.com]
Write your congressman. Tell him he sucks.
(Score: 2) by Runaway1956 on Monday May 25 2015, @02:14PM
I notice that Mr. Aziz attacks the inflation charts, but doesn't bother to analyze any of the other Shadowstats figures. Perhaps Aziz is correct - Shadowstats simply attaches some constant to the government's figures, and inflates the figures with that constant.
Or - alternatively - the government is using it's own constant to under report the real inflation?
You'll have to do a little better than Aziz' article to convince me that Shadowstats is garbage. Got anything more?
BTW - I have read the article you cite before, and simply dismissed it as sour grapes.
(Score: 2) by Non Sequor on Monday May 25 2015, @09:42PM
I spent the last two weekends working on a side project that involved wading through the published microdata for the last eight years of BLS consumer expenditures surveys. The data's complex and it has some noise in it, but overall it's well maintained and is consistent with the published figures. I also note that the data implies that retirees balance expenditures to their income, which is a harder result to fake without creating inconsistencies with other information.
I haven't tried to reproduce the CPI methodology, but I was able to match key figures in the BLS consumer expenditures report and I was able to see the methodology details that explained the remaining differences. There isn't a hidden government fudge factor which disappears when you process the data directly.
Do I believe that inflation methodologies are oversimplified and may over or understate the impact of certain types of expenses on people's standard of living and that other metrics might be useful for looking at these issues? Yes. Do I think ShadowStats accomplishes anything like that by fudging a number that is derived from an externally consistent dataset? No.
Write your congressman. Tell him he sucks.
(Score: 0) by Anonymous Coward on Monday May 25 2015, @06:38PM
The thing with inflation is it *depends* on what you are talking about.
For example if you talk about cars it is pretty clear there is inflation. In the year 2000 I could buy a nice bmw for about 32k. The same car today would be 50-60k. Yet a gallon of milk is about the same price.
This also varies wildly from region to region and item to item.
The only way to get a 'true' inflation rate is to put every good in there. Yet the numbers are cherry picked. They are manipulated by definition of how they gather the data.
For unemployment I look at total employment. It includes people who are not even going to look. But that is OK. As I know the population is growing so therefore on average it should grow too. Yet overall it is falling vs the size of the population.
These scorecard numbers are meant to be talking points the 5oclock news. As our money is built on trust.