On The Ever Increasing Inconsistencies In Reported Economic Data

Tyler Durden's picture

Ever get the feeling that the Bureau of Truth is not being completely truthful? Feel like the ADP is to the NFP like the ISM to the regional Fed Surveys, and as the surging Mfg ISM employment diffusion index is to the plunging Service ISM employment diffusion index (i.e., both can not possibly be correct)? You are not alone. David Rosenberg summarizes which recent data releases are so blatantly incomprehensible, one wonder when the government will announce an AXA Rosenberg-like computer glitch and say all its data for the past 12 months has been compromised. Either that, or we await the introduction of the Birth/Death adjustment to every single data series released in America imminently.

Here is David with much more on the topic (from Gluskin Sheff):

The latest batch of data has been highly confusing, to say the least. The chain store sales data were skewed by one-offs, such as retroactive jobless benefit checks that were mailed out in early August and the growing number (17 this year) of States offering sales tax holidays. We estimate that absent these influences, year-on-year sales growth would have been closer to 1% than 3%.
The spending data also belied the information contained in the Conference Board’s consumer confidence survey, as the facts-on-the ground ‘present situation’ index sagged to 24.9 in August from 26.4 in July — only 5% of the time in the past has it been so low. The ISM manufacturing index, which really got the ball rolling on this ‘take out the double-dip’ trade, managed to spike even though the three leading sub-indices — new orders, backlogs and vendor performance — all declined in what was a 1-in-100 event.

Not only that, but the employment component of the ISM surged to its highest level since December 1983, and yet the manufacturing employment segment of the payroll survey fell 27,000 — the first decline this year and the sharpest falloff since last October. Furthermore, the manufacturing diffusion index slumped to a seven-month low of 47 from 53 — in other words, fewer than half of the industrial sector was adding to staff requirements last month. It begs the question as to what exactly the ISM is measuring.

The list of inconsistencies in the data didn’t stop there. The entire increase in private sector employment in August was in the service sector — mostly health and education, which says little about the cyclical state of the economy. Yet 90 minutes after the jobs number was released, we got the ISM non-manufacturing survey and it flashed a contraction in services employment to a seven-month low of 48.2 from 50.9 in July.

Just a tad confusing, but the newly found bullish view of the economy is sort of corroborating evidence.

The employment report did not detract from the view that the economy is losing steam. The fourth quarter of a recovery typically sees real GDP growth of over 6% at an annual rate, but in this post-bubble credit collapse, what we got this time was 1.6% at an annual rate in Q2.

Moreover, there is nothing in the data to suggest anything but a further slowing in Q3, and the only reason why there is no contraction this quarter is because it looks as though we are getting another lift from inventories — though now the buildup looks involuntary, which will cast a cloud on fourth-quarter GDP barring a sudden reversal in the declining trend in real final sales.

Private payrolls were +247,000 when the equity market peaked in April, it slowed to +107,000 by July and was +67,000 last month. What does that suggest about the trend? Ditto for goods-producing employment, which was +67,000 in April, subsequently softened to +37,000 by July, and in August was the grand total of zero.

One can easily draw the conclusion from the data that we have dodged a bullet. But that does not mean we are out of the woods. Employment is a coincident indicator. Leading indicators, such as the ECRI, continue to deteriorate and to levels still consistent with nontrivial double-dip risks. Keep this in mind — private payrolls came in at +97,000 in November 2007 and the “Great Recession” began the next month. In other words, the +67,000 tally we saw today basically tells you nothing about how the pace of economic activity is going to unfold as we move into the fall.

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Millennial's picture

Reminds me of when I went on a hoggin' binge.


The Ministry of Truth "Minitrue" can go make like David Carradine, get belt or a neck tie, fucking hang themselves and die.   

Cistercian's picture

Great news!Each person's share of the national debt has dropped below a penny!

 This is due to a slight correction of the population numbers by the Bureau of Statistics.

 Bacteria are now counted as residents in the population report.

  Truth is so easy......

Johnny Bravo's picture

The market is setting up to take a whoopin into the close!

That's right!  Right now, it's going to tank.

If the math question can't be more than three characters long, don't ask me what -33*34 is!  Bungholes!

Noah Vail's picture

I would pose the question differently: Do you ever NOT have the feeling that the Ministry of Truth is lying?

Chemba's picture

The only thing you need do to be informed is listen to ObaMao and watch North Korea TV (MSNBC)

i.knoknot's picture

why must you call names? Maobama is doing the best he can.

yakmerchant's picture

He certainly is.  He's doing the best he can to turn us into a marxist state where the first and second amendments are a thing of the past.  

PulpCutter's picture

Obama isn't even vaguely socialist.  Corrupt?  Sure - just like Dubya, Dodd, Shelby, Frank, etc..  What we have is the govt stealing everything that isn't nailed down, and handing it to WallSt.  That's corruption, not socialism.

You're just repeating crap you hear spewed endlessly on Fox.  Turn it off & try exercising the logical part of your brain.

Hall 9000's picture

Tyler Durden wrote:

"Ever get the feeling that the Bureau of Truth is not being completely truthful?"

The song remains the same.





SRV - ES339's picture

Am I missing something, or do you have and extra L in there?

Check this (possible avatar) link out... it may work for you... cool wallpaper for anyone else out there!



soliton's picture

 The data is confusing because the indicators have a margin of error, and when things are going from positive to negative there is some mismatch. Here: http://www.hussmanfunds.com/wmc/wmc100816.htm

SheepDog-One's picture

Not only margin of error to play with, but they also depend on revisions like crazy. Remember last year-end dump of 1 million jobs due to all the monthly revisions? Its all just crap from the federal DOMSU dept of makin shit up.

jbc77's picture

I don't think anyone should be surprised that government data sets aren't adding up. What are they not bending and maniupulating lately? I also get the strangest feeling that the power elite are trying super hard to keep our markets from all out chaotic fall. I suspect keeping the markets in check creates a bastion of safety for them. After all, the :markets" are the indicator by which the average dumb Anerican measures the health of our economy. That and retirees will probably pick up pitch forks if they lose any more money in the Fraud Street Casino.

The latest ramp job should scare people. No volume, bad news = higher market? It smells too much like a pre crash melt up. Gains driven by bull shit evenutally come undone in a frenzied manner. Good luck to all the tout TV lovin' bulls.

i.knoknot's picture

it's odd that we both resent and don't trust these silly numbers (or the agendas behind them), but we have no other reasonable choice than to consider them anyway. (hell, i'm not gonna go call 500 companies and ask them about their current hiring numbers, but i might take some mental notes next time i'm in wal-mart or safeway...)

"worse/better than expected" has *got* to be the most effective syntactic addition to the language *ever* for the various economic Goebbels of the world (Krugman etc.). and we still listen.

it could be argued that if all of the numbers are skewed/biased consistently, that perhaps the trends are still intact, but when a previous quarter's GDP is revised downward -1.4% and you annualize it to the -5.6%... it's hard to even care about the trend...

serious question: what indicators *do* y'all use, when we know we can't trust the BDI, VIX, BLS-numbers, WTI-crude, Spot gold, etc. ?

big mac index?

Ivanovich's picture

I guess I'm kinda confused as to why all this is surprising.  It's the last trick in a now-empty bag of propaganda.  What choice do they have but to lie about the economy?  It's the only thing keeping us over the abyss.  The problem is that most of main street is all-too aware that the real economy sucks.  Lying about stats doesn't convince them.  It only helps the pump monkies on Wall Street make money.  How much of the public actually owns stocks?  How much actually has a 401k percentage-wise?



i.knoknot's picture

we're not surprised at the lies themselves, but rather the audacity and staying-power of the liars?

my concern comes from the gut knowledge that these guys are so blatant in their lies, that even the "average joe" will catch on. when that happens, the crisis in confidence could be so massive that Sept 2008 will be nothing in comparison.

but maybe i'm giving the "average joe" more credit then they deserve. most of my "above average joe" friends still seem unaware of the rising tide, and it's been rising for 3 years.


kathy.chamberlin@gmail.com's picture

lies or just plain old fraud?

come on, everybody lies.  this is just deception, is a step up to premeditated fraud.

i.knoknot's picture

i'm starting to believe the premeditation on this fraud started when the FED was formed in 1913.

nice to know we're finally catching on...

Millennial's picture

Did some one say peak oil?


Peak or not peak you may soon die for it. Welcome to the Green (looting) Macine, new meat.

Tips from a 'Nam grunt:

1: Don't volunteer for nutting.

2: Carry as much ammo as you can already loaded into magazines.

3: Steal a frag and use it on any prick lifer who tries to get you killed.

4: When in doubt hose anything and everything that isn't wearing an American uniform.

traderjoe's picture

Shadowstats.com warning of a benchmark revision downwards of payroll data next month of recent jobs reports. Last year the revision was a million jobs. But of course the data gets revised too late for anyone to care...

oklaboy's picture

I am shockeked, totallly shocked, how dare you say anything like that about our great leader?

Millennial's picture

Our great leader is awesome. he bought me ice cream. Then we got crabs at joe's crab shack.

romanko's picture

USA, the new USSR

Millennial's picture

How do I copypasta images and video in comments?

MichaelG's picture

Write an article that gets published. Otherwise ol'-fashioned links are your only option.

Millennial's picture

I thought I saw some guys post images. 

MichaelG's picture

Sure - e.g. Cog Dis or RobotTrader, but they've also published articles on the site. (Maybe you get those permissions without that if you ask nicely! Probably have to let TD give you a chemical burn first...)

kathy.chamberlin@gmail.com's picture

b l o w   j o b  might do it.

midtowng's picture

With all the "good news" about unemployment, no one is bothering to notice that the U6 went up (16.7%).

  Plus, the only reason it didn't go up even higher was because of a weird drop in the number of long-term unemployed. About 320,000 long-term unemployed are not being counted anymore. Where did they go?

Bold Eagle's picture

Hint: they are off government rolls as they are past 99 weeks of benefits. You may notice more beggars and/or robbers in the coming months.

MichaelG's picture

"You may notice more beggars and/or robbers in the coming months."

Anyone else read this and immediately think 'TBTF'?

(You're not wrong, though!)

midtowng's picture

Speaking of TBTF, you've got to check this out:


In Afghanistan, investors in Kabul Bank are counting on U.S. support to stem a run on the country’s largest bank.

“America could support Kabul Bank to the last penny,’’ Mahmood Karzai, the Afghan president’s brother and largest bank investor, said in a WSJ interview. “The full faith and credit of the U.S. government behind the Kabul Bank–what more could you want?”

Afghanistan, which is receiving billions in humanitarian and military assistance from both the U.S. and Europe, is arguably a ward of both those states. What’s a few more billion to back up a failing Afghan bank?

Another reason bolstering Kabul Bank’s argument for a bailout: Its executives seemed to have followed the western play book for ruining their bank.

As the WSJ points out, Kabul Bank is accused of giving “clandestine” loans to themselves and Afghan government insiders.”

whatsinaname's picture

Yes, have noticed several homeless folks on prime Chicago streets lately - very uncommon compared to recent years.

That said, serious crime actually dropped during the Great Dipper while petty crime took shot up initially and dropped again as we got deeper into recession. Maybe the value system changed ?

kathy.chamberlin@gmail.com's picture

homeless are taking over this town. this feely good city, can't be viewed as taking a hard stance towards the homeless, with the "no camping law". it is out of control. this town's reputation of tolerance is only going to accelerate and be known as the "BEST assisted living for the homeless, town". they have a beautiful maintained creek for their toilet, water fountains every where, manicured lawns of lush grass to sleep on, weed stores every where, the most beautiful gardens to gaze upon. tables and benches to sit or sleep upon. the homeless folks are even provided with bikes. they don't have to use the usual grocery shopping carts. got to love it.


Suggest you check:

1: Under local bridges

2: Tent cities

3: Soylent Green factories

Caviar Emptor's picture

None of it will matter cause the plan is to inflate it all away down the river. GDP will look nominal juicy and companies will be reporting money coming out of their butt holes, and 401Ks will look eye poppin', and they're hoping we'll all join them for a smoke under the money tree.



Bold Eagle's picture

Me too like caviar. Where do I get my 99 week supply?

SheepDog-One's picture

Chinamart, 40 pound cases for $19.95 right next to the 'Caviar Helper'.

i.knoknot's picture

don't forget the crackers and melamin dip over on aisle 3

rfaze's picture

Everything and anything will be done to support the market until the election. 

SheepDog-One's picture

Maybe so, but I dont believe thats the plan. I see them dying to do QE now, one last wild pump here to get any remaining retail dummy long, then crash the markets for Oct surprise 'Obama to the 401K rescue' market stick save that they believe will propel them to popularity again and thus electoral victory. Or at least avoid an ass kicking.
I dont believe that would be the outcome at all myself. the people hate bailing out the banks, but I sense that is their plan!

plocequ1's picture

This is exactly what I've been saying. Everyone is looking at charts and analysis like were in the 90,s and actual humanity was driving the market. Today, the fed and the monoliths are running the show. It's sad, But true.

walküre's picture

If you and the next guy can figure this out... it probably won't happen.

Think contrarian.

Republicans will take control back, bring austerity and max. pain will start.

Max. pain is necessary to be able to survive at all.

Battleaxe's picture

Tyler, please! More Death Row T-shirts ads and NO Profit with Cramer ads.

Bankster T Cubed's picture

the whole show is one gigantic farce that drifts ever further from a foundation of truth and reality

the scumbags at the helm have the pedal to the metal

racing us full speed into THE MADOFF MOMENT