To expand on Mark Twain, there are lies, damn lies, government statistics, government hedonically adjusted statistics, government subsequently revised statistics, government benchmark revised statistics, government seasonally adjusted statistics, and now, government double seasonally adjusted statistics. For those who have better things to do than waster your time trying to decipher what comes out of the government’s statistics mills, Tyler Durden, at zero hedge.com, explains the newest effort to put lipstick on the ailing pig known as the US economy:
It’s official: after seeing it work so well for years in China, the US Department of Commerce’s Bureau of Economic Statistics has officially replaced all of its excel models with just one function. The following:
As Steve Liemsan hinted a few days ago, in what we thought was a very belated April fools joke, the BEA has finally thrown in the towel on weak seasonally-adjusted US GDP data, and as a result has decided to officially proceed with a second seasonal adjustment: one which will take all the bad data, and replaced it with nice and sparkly, if totally fake and goalseeked, GDP numbers.
As Bloomberg reports, “the way some parts of U.S. gross domestic product 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.”
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.
And since economists pride themselves in giving complex names to what even 5 years olds now grasp is open data manipulation, the technical term the BEA will use to goalseek historical data is now also clear: “residual seasonality”
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.”
To continue reading: Double Seasonally Adjust
If snow hasn’t melted off your driveway as spring approaches, and you’re too lazy to shovel it off, that can be termed “residual seasonality.” It sounds impressive when you explain to your wife why you’re not going to shovel it off.
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