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How The ISM Beat Expectations: It Assumed January Weather Was Worse Than The Polar Vortex
Earlier today, when the Markit PMI and the ISM non-manufacturing data disagreed violently over a key aspect of the economy, namely that according to the first, the all important, forward-looking New Orders had dropped to the lowest since the great financial crisis, while according to the latter, they rebounded modestly in January, we decided to go straight to the source: the unadjusted data which does not incorporate any gratuitous seasonal adjustments (which for the ISM, were just adjusted as part of its annual revision spectacle).
So without further ado, we present the ISM non-manufacturing New Orders. We let readers figure out which is which.
Furthermore, one is declining and at the lowest level in a year; the other is rising having staged a modest rebound in January. Furthermore, the monthly differential between the two series is the widest it has been in over two years...
... begging the question: just what specific factor mandated the biggest seasonal adjustment boost to the January New Orders data, one which surpassed the adjustment seen even during the economy crippling Polar Vortex of last January, and which ultimately led to the ISM headline number "beating" expectations?
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We seasonally adjusted some seasonal adjustments, folks
and with that, I'm outta here
Fudging the books is now considered legitimate economic reporting.... when the truth is politically difficult, well, don't report it... BS instead. It's the new Western way.
That's fine we can jsut make it up via the printing press. Everyone of our trading partners knows we are good for it, cleanest dirty shirt. We can keep printing forever with no real negative effects. We have never defaulted before and never will. Our debt is a good as gold.
We have never defaulted before except.....
The Continental currency default in 1779....
The default on Continental domestic loans in 1789....
The Greenback default in 1862....
The Liberty bond default in 1934 when Roosevelt revalued the dollar from 1/20th of an ounce of gold to 1/35....
In 1971 when Nixon pulled us off of the gold standard and rendered the dollar pure fiat....
Seems like it may be time for another....
Oh I'm sorry, you were being sarcastic. Mea culpa.
Well there you go!
It's simply a matter of adjustment!
How much does it cost to get these guys to come look at MY books?
any good CFO knows to under-promise and over-deliver on results.
The January weather is going to be worse on record. Then actuals come in, well, better than expected. Who whouodda thunk that?
DUH
Moral justification... Don't leave home without it....
Don't forget that it's tax season and your declared income is about to get seasonally adjusted upwards by the same people.
These stats brought to you by the Al Sharpton accounting office at H&R Block
Is this the same seasonal adjustment my wang experiences when water temperature drops?
Figures lie and liars figure, same as it ever was.
Once I called ISM and asked them if they were ever gonna just tell us the truth. Without missing a beat they continued to peddle the "smoothing" effect. ISM 1 Us 0
I guess the West Coast doesn't get included in these numbers? In California we had one of the dryest Jan's ever with temps in the 60's most of the month. Could not have been nicer other then the lack of snow in Tahoe!
'Seasonal Adjustment' is a 'needs' based program. Only data that can demonstrate true need is given these benefits. Who among us would not want the neediest data to be given a small handout. to do otherwise would be heartless.