The GDP’s hilarious (false) numbers
Today I’m writing about the GDP — the gross domestic product, the gauge by which Washington measures all the business done in this country.
But wait, there’s more. In fact, the GDP can be awfully amusing — in its own way. For example,
did you know that virtually all economists and members of the media are still eating crow — the feathers and all — because they believed statistics put out by the Commerce Department since the Great Recession were reliable and truthful.Those numbers were neither. And late last week, Commerce lowered its GDP figures for the last six years while also producing more statistics for recent quarters that will someday need to be corrected.
So what does Commerce now think about the economy? It says growth has averaged just 2 percent annually over the last six years, and not the 2.3 percent it previously reported.
But you know what? Both those
levels of growth are lousy by historical standards. But with the correction, the worst economic recovery in 70 years is now officially even weaker.The revision made to the GDP in the third quarter of 2012 is worth special attention that nobody else has given it. Remember, 2012 was the year of the last presidential election. And the third quarter — July, August and September, with the GDP number announced in October — was smack in the middle of all the action.
Commerce said in that October, just weeks before the election, that the economy was growing at an annualized rate of 2.5 percent.
Now Commerce has corrected the third quarter of 2012 to just 0.5 percent. So Commerce overstated growth in this very important period, as Americans were about to go vote — by a magnitude of five. Commerce said the mistake was caused by changes in “methodology,”
especially in the way it deals with defense spending. Seasonal adjustment changes also had an impact.
Growth in the fourth quarter of 2012 was just 0.1 percent. So when you put the third and fourth quarters together,
the country was alarmingly close to officially being in a recession — a point that no president would want to brush up against when trying to get reelected.You might also recall that the unemployment rate was enjoying a suspiciously sharp drop in the third quarter of 2012, which also helped out the president.And as I’ve already documented in a number of columns, at the Census Bureau’s Philadelphia region, a bunch of data-collecting computers — laptops that collect data used to calculate the unemployment rate — suddenly went missing in September of 2012.
Census is the armpit of Uncle Sam’s data operation: Everything it does stinks.Commerce also said the economy grew at an annual rate of 2.3 percent in the second quarter of this year. Not great — but better than the revised 0.6 percent annual growth in the first quarter.The trouble is, consumer spending is credited with much of the 2.3 percent growth in the second quarter.
And as retailers will attest, consumers just aren’t spending as vigorously as Washington seems to think.
In fact, a recent poll found that 55 percent of Americans think the economy is getting worse, not better. That’s not the kind of mood that compels us to drop dollars.
So,
you can expect the 2.3 percent growth to be revised downward in the near future.Still, the crow-eaters were happy for temporary good news.
http://nypost.com/2015/08/03/the-gdps-hilarious-false-numbers/=======================================================
I would suggest, the American example, probably isn't much different here in OZ, nor elsewhere!
As the old adage goes-
If it looks to good to be true, it probably isn't (true)!!!
And, similar things continually happen, in the US, OZ & elsewhere, irrespective whether those Politicians in power, come from the Right, Left or Centre, as a quick look at OZ Polly Perks will confirm!!!
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