Thursday, August 22, 2013

(Related Update): Do you believe state-generated economic numbers?

Related Update:   If you answered "no" to the above question, then you'll most likely not be surprised by the results of a recent Gallup Poll showing a huge spike up in unemployment.  Based on this, I can promise you that the next government unemployment report, though it may show movement upward, will not show a spike anywhere near the magnitude of the Gallup spike.  From's report [ht: Drudge]:
Outside of the federal government's Bureau of Labor statistics, the Gallup polling organization also tracks the nation's unemployment rate. While the BLS and Gallup findings might not always perfectly align, the trends almost always do and the small statistical differences just haven't been worthy of note. But now Gallup is showing a sizable 30 day jump in the unemployment rate, from 7.7% on July 21 to 8.9% today.
Original Post:  Rick Santelli doesn't.  Neither does Nick Sorrento at Against Crony Capitalism:
The Consumer Price Index has increasingly been manipulated to depress official inflation numbers. More and more formulas are used to factor in the “substitution” of goods in the marketplace (If your cereal becomes too expensive you substitute it with generic cereal or oatmeal for instance) and other consumer phenomena. But these formulas are probably educated guesses at best and it is reasonable to question the number magic being employed.

Business school professor Christopher Balding at Peking University apparently doesn't trust Chinese state-produced economic figures:
“There is strong evidence indicating that the rate of real Chinese GDP growth, and ultimately total real GDP, may be significantly over stated,” said Christopher Balding, associate professor at Peking University’s HSBC Business School, and the report’s author.
Through “significant and systematic irregularities”, official estimates overstate China’s true GDP by 8 to 12 percent, or $1 trillion, according to Balding.

My personal experiences tell me that things are more expensive now than they were just a couple of years ago.  And there's no doubt that administrations -- both Republican and Democrat -- will manipulate economic data to their advantage.  So I pretty much take economic data from the government with a large dose of skepticism.