LOOK AT THE BIG DIVERGENCE BETWEEN “SOFT” AND “HARD” DATA … Ummm ..never mind….
LOOK AT THE BIG DIVERGENCE BETWEEN “SOFT” AND “HARD” DATA … Ummm ..never mind….
Since this year the Doomers haven’t even been able to rouse themselves up enough to call for OMG recession imminent!!!, they have had to settle for how slow the growth in the economy has been. Their favorite theme has been the alleged divergence between the “soft” consumer confidence and ISM survey data, and the “hard” data, like industrial production:
Oh, wait! Never mind …
Well, then, how about durable goods? Since it was just updated this morning, let’s take a look at that:
Durable goods orders are up over 15% since bottoming in June 2016 (for the record, I expect a downward revision to the big surge this month and/or a decline next month — the series is noisy). “Core” capital goods are up about 6%.
#@&*!!
Damned positive data! It’s just really hard to get all lathered up and steamy about doom and gloom these days . . . .
I have a question for any Angry Bearers who spend a lot of time looking at government data: When they announce the headline change in GDP or GNP is that an inflation adjusted number? And if it is inflation adjusted what index does the government use to adjust it? CPI would seem like a poor fit. If it is not inflation adjusted could a big part of our “slow growth” be attributable to low inflation? I realize these are elementary questions, but I honestly do not know the answers and while I could try Googling them, I figure this blog might get me more accurate answers with less work
GDP is pretty irrelevant to understand, because you can’t. The quarter after it is done, then you get 10 years or yearly revisions and then decades more of revision from time to time. The way inflation has been calculated has changed since `1983, twice.
aka, if potential output RGDP was 2% and the economy was growing at 2.5% for 10 years, you would slowly fill that output gap. That doesn’t mean the government is going to get it right, in the proceeding years or even decade. The fact that unemployment started dropping again suggests output has been creeping back above trend since the 2nd half of last year.
Frankly, the so called “slow inflation” looks like a mirage to me. Driven by speculatory and yearly hedonics. If you get rid of a few baskets, inflation has actually been rising from 1% to 2% this year. Yet, the Gman had it soaring early on and then dropping it back down with stupid drop in energy the Saudi’s are “fixing”(along with the Trump dollar hike which died with no tariffs or BAT and will continue to die as the European monetary system catches up to the US).