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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: 2) by jmorris on Monday May 25 2015, @05:09AM
Come on. While the analysis here is pretty good, as a general rule ZH is a wierd mismash of Negative Nancyism, sarcasm, comic relief and pro Russian propaganda. Not saying I don't check it every day or so for the lulz, but if you are taking it as a serious news source I pity ya. You probably haunt InfoWars, WND, HuffPo, Vox and other less than credible sources too.
I wouldn't have said anything, since they are on target for a change, but this isn't the first time in recent memory for em to get linked.
(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.
(Score: 5, Insightful) by VLM on Monday May 25 2015, @12:08PM
My analysis of ZH is its kind of like that old saying about democracy, it really sucks but all the alternatives are even worse.
The alternatives are a handful of megacorporation owned, corporate advertiser supported, government boot licking propaganda outlets that are so shameless they'd embarrass a Pravda editor from the 80s, which starts making ZH ravings and rantings look much better.
Another way to put it, is ZH looks like shite, and it takes a lot of work but the Times and the fedgov and CNBC do a lot of work to make ZH look comparatively better. I mean, you just can't take mainstream stuff seriously anymore, or if you do, its a recipe to lose your shirt in the markets.
A large part of it is the corruption of the existing system. Naturally thats going to lower the bar until almost anything is better on average, so some of the ZH stuff is pretty stinky; yet simultaneously less stinky than the alternative.
Or yet another way to put it is probably 50% of it is crap but its competing in a market where the standard is 90% crap.
(Score: 3, Interesting) by VLM on Monday May 25 2015, @06:10PM
Here's a great quote of two paragraphs from one ZH post today toward the end of a post discussing two recent stupid movie releases:
Memorial Day is a dreary moment to have to face this onrushing calamity of rocket-propelled medievalism rampant — all those poor American soldiers blown up and mangled the past twelve years. It’s also interesting that the news media is totally out-of-touch with the biggest prize on the great gameboard: Saudi Arabia. You think ISIS overrunning Iraq is bad news? Wait until the ordnance starts flying around Riyadh. Notice, too, that there’s no news coming out of Yemen on the base of the Arabian peninsula, a failed state with a population nearly equal to its neighbor. If we have any idea what’s going on there — and surely the Pentagon and NSA do — then it’s not for popular consumption.
This is ironic because if the trouble happens to spread into Saudi Arabia — and I don’t see how it will not — then we’ll find out in a New York minute how America’s future is not about monster trucks, cars, dirt bikes, holograms, phone apps, and all the other ridiculous preoccupations of the moment.
(Score: 1) by KGIII on Monday May 25 2015, @05:25PM
That is why I get all my news from TalkingPointsMemo and Pravda. Yes, all of it... </sarcasm>
"So long and thanks for all the fish."
(Score: 2) by istartedi on Monday May 25 2015, @10:01PM
I keep waiting for ZH to go off-line. You know that the very next day, the dollar will collapse, revolution will break out, and Obama will pull off his rubber latex mask to reveal the lizard underneath.
Appended to the end of comments you post. Max: 120 chars.