To say that more and more people trust government economic data less and less is an understatement of major proportions.
The passion of the situation seems to reach a crescendo each month, just around the time the Labor Department releases its inflation data. It would take me considerable time to synthesize a "family friendly" version of some of the e-mails I received yesterday from clients, "critiquing" the latest Consumer Price Index.
We will just let it go at this. A +3.2% year-over-year CPI is a result with which few people I know (as in "no people I know") personally identify!
In August, I asked friend and client, John Williams, if he would write a series of articles for Gillespie Research on the growing "shortcomings" (euphemism) of government economic data and the reporting thereof. This series appeared under the umbrella title, "Government Economic Reports: Things You've Suspected but Were Afraid to Ask!" I had a strong hunch this work would be well received by our readers, which was indeed the outcome!
Instinctively, everyone knows there is something "wrong" (another euphemism) with many if not most of the economic numbers that come from Washington, numbers that can and do influence our lives in a major way. As one example -- a major one, at that -- look at the adverse cumulative impact a chronically understated Consumer Price Index can and has had on the monthly checks of millions of Social Security recipients. Or, as another example, look at how these numbers whip around the financial markets at given moments in time. Not to mention that suspect data are increasingly creating material capital market distortions of a longer-term nature.
The interest in and response to John Williams' four-part "Government Economic Reports..." series was exceptional. This was a clear reflection of John's extensive knowledge of this critical area, his ability to communicate effectively his body of knowledge, and his tenacity to confront what is often a highly controversial topic in a head-on manner.
The series put in place a good deal of information and historical perspective on much of the hanky-panky that has crept into government data over the years. John's latest effort expands on this, as well as specifically relating these machinations to the most recent economic releases. It creates the first edition of what will now be a monthly undertaking, one for which I believe there is a significant -- and regrettably -- a growing need.
Now, read and enjoy the inaugural edition of "John Williams' Behind the Government's Numbers" at: http://www.gillespieresearch.com/cgi-bin/bgn/article/id=378