This page has been archived and commenting is disabled.
The US Department Of Commerce Officially Jumps The Shark, Will "Double Seasonally Adjust" GDP Data
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, th eBEA 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.”
More details on how economics has just devolved into a complete farce on a scale that even the Chinese Department of Truth will find laughable:
“BEA is aware of the potential for residual seasonality in GDP and its components, and the agency is looking for ways to minimize this phenomenon,” the division said in the post. More information will be available in a BEA Survey of Current Business report scheduled for mid-June publication.
The agency is exploring ways to address possible issues in measures of federal government defense spending, where research has shown that first- and fourth-quarter growth rates are lower on average, the BEA said, reiterating a statement given to Bloomberg published May 18.
It will also start seasonally adjusting some inventory components that currently aren’t, and also some data from the U.S. Census Bureau’s quarterly services survey, it said. The latter should boost the accuracy of consumer spending estimates, it said. The changes to the calculations will cover the period from 2012 to the present.
Additionally, the BEA is reviewing all series that figure into the GDP calculations to find and fix any leftover biases that exist within its current methodology.
And to complete the total collapse of US reporting integrity, here is the full BEA blog post on the topic of goalseeked data, aka "residual seasonality."
* * *
BEA Works to Mitigate Potential Sources of Residual Seasonality in GDP
The Bureau of Economic Analysis (BEA) is working on a multi-pronged action plan to improve its estimates of gross domestic product (GDP) by identifying and mitigating potential sources of “residual” seasonality. That’s when seasonal patterns remain in data even after they are adjusted for seasonal variations.
Each spring, BEA conducts an extensive review–receiving updated seasonally adjusted data from the agencies that supply us with data used in our calculation of GDP. Most of the data the feeds into GDP is seasonally adjusted by the source agency, not BEA. At the same time, BEA examines its own seasonal factors for those series that BEA seasonally adjusts itself. All that work takes place in preparation for BEA’s annual revision to GDP and its major components, which will be released on July 30.
As a result of this ongoing work, BEA is aware of the potential for residual seasonality in GDP and its components, and the agency is looking for ways to minimize this phenomenon.
• One of the areas we’re currently reviewing is possible residual seasonality in measures of federal government defense services spending. Initial research suggests that the first and fourth quarter growth rates are lower on average than those of the third and second quarters. BEA is developing methods for addressing what it has found.
• Time frame to implement: Improvement will take place with the release of second quarter GDP on July 30. Period covered: 2012, 2013, 2014, and forward.
• BEA also will begin adjusting certain inventory investment series that currently aren’t seasonally adjusted.
• Time frame to implement: Improvement will take place with the release of second-quarter GDP on July 30. Period covered: 2012, 2013, 2014, and forward.
• Also as part of this year’s seasonal adjustment review, BEA is planning to seasonally adjust a number of series from the Census Bureau’s quarterly services survey that now have sufficient time spans to which seasonal adjustment techniques can be applied. Currently, these series are smoothed using a four-quarter moving average to attempt to smooth out seasonal trends in the data. While BEA’s review had not identified residual seasonality in the PCE services estimates, applying statistical seasonal adjustment techniques to these indicators will improve the accuracy of the underlying trends in PCE estimates.
• Time frame to implement: Improvement will take place with the release of second quarter GDP on July 30. Period covered 2012, 2013, 2014, and forward.
• BEA will review all series entering the GDP calculations to identify, and where feasible, mitigate any residual seasonality within its existing seasonal adjustment methodologies.
• Time frame to implement: Review will take place with the release of second-quarter GDP on July 30. Period covered: 2012, 2013, 2014, and forward.
• Longer term–beyond July 30–BEA will continue looking at components of GDP to determine if there are opportunities to improve seasonal adjustment methodologies. Should BEA identify other areas of potential residual seasonality, BEA will develop methods to address these findings. If research suggests that residual seasonality originates with already seasonally adjusted source data, BEA will work alongside its source data agencies to determine the appropriate course of action.
* * *
Some further thoughts: when, not if, the Fed's rate hike leads to a recession, that too will be seasonally adjusted away. And QE4 will be called tightening in the name of "residual seasonality."
And, of course, once the Fed's credibility finally crashes, its seasonally adjusted credibility will be at an all time high.
»
- 65684 reads
- Printer-friendly version
- Send to friend
- advertisements -
Liberty! What liberty? Freedom; that is the grandest of all illusions; just look up the term. Welcome to "Slave-landia"; "land of the enslaved and home of the weak-minded".
One can legitimately question the appropriate meanings of words in an attempt to hold the most effective set of concepts and mental-units. The terms "liberty" and "freedom" are not trivial to nail down in the most effective way, for many reasons.
In the process of trying to figure out what meaning to adopt for "freedom", it is entirely reasonable to consider the following meaning. That is, humans are always free - they always have liberty and freedom.
Why? Consider this perspective. The earth has always been populated by dangerous predators, and always will be populated by dangerous predators (both macroscopic and microscopic), no matter what mish-mash of organizations some humans attempt to impose on other humans (via family, via religion, via government, and so forth).
So one could reasonably conclude that humans have freedom because they are capable of volition AKA "free will". One might consider this approach for several reasons, including the following.
First, the above is simply plain fact. Humans will always be "told what they must do" and "told what they must not do" by other humans. Nothing will stop parents, friends, relatives, neighbors, teachers... and endless human predators who call themselves "religion" or "corporation" or "government" or whatever.
Second, to consider oneself to be always and inherently free tends to put the mind in the appropriate state. Which is, to reduce ALL issues related to "liberty" and "freedom" and "authority" and "government" to the simple, basic, true fact. Which is, we can choose anything we can imagine, we can take any actions our body is capable of taking, no matter WHAT physical or "social" environment exists.
Of course, another fact of reality is... actions have consequences. We may be utterly and totally "free", living in some far-away unpopulated forest or jungle or desert... but this does not in any way prevent [macroscopic through microscopic] animal predators from assaulting us, harming us, even destroying us.
And the same is true in more populated areas, the only difference being the fact that one additional animal predator is thrown into the mix, and that animal is "humans". Humans are the most crafty, deadly and diabolical predators, but the simple fact of the matter is... they are just predators.
So. Are we free or not? No matter where we live... alone on mars or in some spacecraft, or alone in some remote boonies, or living in a typical suburb or city... we are free to choose our actions, free to take actions, and will enjoy/bare/suffer the consequences of out actions... and the actions of other organisms, and the actions of simple physical processes that have nothing to do with life (rain, wind and sun for example).
The advantage of adopting this straightforward (or "simplistic" or "oversimplified") view of "liberty" and "freedom" is clear. It emphasizes that we should look at EVERYTHING about the environment, including the physical environment, the living environment (plants, animals, lifeforms), including the human environment (which is clearly just part of the living/organism environment). It opens our perspective to every option, to every possible action, and to every possible consequence. This approach is a partial cure to "normalcy bias". If "life sucks", this approach opens up enormous numbers of alternatives to consider... at every step of the way through life.
Plus, this approach also puts "language" into its proper place and perspective. The noises that come out of human mouths are... just noises. They do not have some sort of metaphysical significance. They have no special power of nature. ONLY actions taken by humans have power, just like actions of everything else in the universe.
And so, this attitude also helps one put other ideas, concepts and mental-units into their valid and correct perspective. It helps our brain understand that all the following are pure fiction... they literally do not exist: "law", "state", "nation", "official", "authority", "corporation", "government"... and endless other bogus mental-units jammed into our brains since birth.
And so, for practical purposes, what most people mean by "liberty" and "freedom" is something like "how aggressively to other humans threaten me, and attempt to harm me, and actually harm me?". Because that's all there is for these terms to mean beyond the simple, straightforward, metaphysical meanings I described above.
So what's the appropriate attitude? Well, I can't answer that for others. It seems a great many people would much rather be abused, harmed and enslaved than move to a different environment. To me, and to a small percentage of other humans on this planet, this attitude seems utterly and completely absurd, even insane. And yet, this IS the choice humans make every single day. To remain in terrible environments where the threats and assaults are constant and egregious, even when a great many vastly more pleasant places and lifestyles exist.
And as time passes, an ever-increasing percentage of the human population become willing to accept more and more egregious threats, abuse and harm.
This too is a fact of reality. These humans cannot be saved. The vast majority of humans today cannot be saved. And they do not want to be saved.
The huge mistake of most individuals who highly value liberty and freedom is... they have taken a fundamentally collectivist approach to individualism and individual liberty. Because collectivist approaches are soooo common today, and sooo emphasized today, even humans who consider themselves die-hard individualists and liberty-advocates refuse to take any of the many opportunities to improve their own individual lives. Instead, they attempt to get less egregious predators elected. Or they attempt to convince a majority of the population to vote for liberty or liberty candidates.
Their premise is... the entire collective must be free, for me to be free.
PREPOSTEROUS.
And especially preposterous for "individualists"!!! Don't they realize individualism is about that individual who is them? To attempt to extend "their ideas of individualism" to others is not individualist, it is collectivist. We can't force individuals to be individualist, or free.
No large collective has EVER been converted to individualism or liberty or freedom. This has never happened in the history of mankind as far as I can tell (not counting short-lived chaos when predators-that-be completely destroy the civilization they dominate). And almost certainly this will never happen in the future.
However, there is an "individualist" solution, one that has been practiced (and largely successfully) for thousands of years. And that solution is... "get the hell outta dodge". Or more specifically, look at the world, look at all remaining "frontiers" (and closer-to frontiers), choose one, then move there, establish a self-sufficient [as possible/practical] life, and... enjoy a more happy and independent life.
That is the only viable solution. A collectivist "liberty movement" has never worked, and almost certainly never will. So get real, get individual, and get moving!
Anne,
You are right, it is now past time to weigh anchor, and become lost-at-sea
Excellent read, and a better call to action!
Very well said.
The changes should be called "Goldilocks Seasonal Adjustments" - not too little, not too much, just right.
John Williams of www.shadowstats.com , we need you now more than ever.
His statistics are flawed as well. Impossible to believe (in fact, his errors have already been pointed out to him...not sure if he's done anything about them yet).
Don't get the shark jumping analogy as this is totally "in character" for government--not so much for "out of character" leather jacket wearing water skiers.
Relased via Pravda.bs.org
Why does this have to happen during my life? I can't believe I'm actually ashamed to be American. I have always been so proud, used to get a little tear in my eyes hearing the Star Spangled Banner...feel like Obama has succeeded and he has a lot more time left.
Many of us are sharing your pain, Pete. What floors me is that so many Americans believe what Fox news tells them and refuse to see the truth of what's actually going on. Which is the purposeful meltdown of our society.
FED never has and never will reveal complete truth about why they do what they do, they publish cover stories and perform theater to present and maintain a facade.
Right now the FED has some unrevealed motive why they want to raise the FFR, so they must manipulate the economic data to support their plot.
The important point is that the FED WILL raise the FFR this year, and you should manage your investments taking that reality into consideration.
FFR? Tried looking in up online and found the French Rugby Association.
Sorry, just relized it means the Fed Funds Rate. D-oh!
I move to seasonally adjust the residual stupidity of the State's statistics bureaucracy
There’s more than just a fraudulent GDP.
From an examination of a Financial Report of the US Government we find, for example, that government accountants made 75-year projections as if the government would not pay interest on its debt instruments during that time.
And then there were street gangs and drug cartels, the government’s – and China’s – role in arming, protecting and forming alliances with such gangs and cartels… and a dozen or so other items. They all point to a conclusion that a vast operation is being perpetrated… I began Part 2 (of my examination) with the question, ‘What financial shock do Judeo-Bolsheviks plan?’ (Part one and Part two) Do they plan to inflate the dollar to zero… push stocks to 300 times PE, then slam them to 5%-10% of highs… repudiate the federal debt… replace Federal Reserve bank notes with Treasury bank notes…?’… And, how do China’s ghost cities fit into this unprecedented operation? I would like to think that Americans could stop this horror; but, I don’t think it’s possible. They are a conquered nation; not by ordinary means, but by a lethargy induced my medication, an ignorance molded by indoctrination, and a corruption brought on by a mania for dope, foul language and perverted sex.
"but by a lethargy induced by medication,"
YES! Brains and bodies drugged and sickened. The average person is no longer average but far below average when it comes to energy levels.
Drug consumption: up
Fatigue: up
Pain: up
30% of today's teens are on at least one prescription drug long term, according to the Wall Street Journal, so don't expect them to come to the rescue as they turn into their 20's and their prescriptions increase.
Termino de releer "EL QUIJOTE". os lo recomiendo....
hey look i just opened excel, made a column called "Net Worth" and I just typed in 99999999999999999$
aparantly I have been rich this entire time and didnt even know it!
..as long as the checkbook has checks, you're gold!
Why stop at 2012? Would going back farther make Obamanomics look bad instead of seasonally adjusted good?
Lies, damned lies and gov't statistics
More massaging going on than Al Gore on a trip to TImes Square.
The really sad part? Even when the GDP data is faked, it still looks shit.
Oh, so we will be taxed double!!??
All this means is they are not admitting to a recession yet. Whether they are actually going to fudge the numbers I doubt, because with any conscientous adjustments, the numbers will still show the same.
I dunno. It all seems to make perfect sense to me.
I love that name, too: RECIDIVIST SEASONALITY
In a previous life I did business with many car dealers. A joke amongst them was when a customer asks "How many miles are on the car", their answer was "How many miles do you want on it?" That punchline apparently applies to any government-generated number.
I should be able to get more porn gigs, now that I can measure my cock-length in seasonally adjusted inches, right?
Don't take measurements during the winter seasonal adjustment.
Not even if it's double?
I use the metric system, and use MM's to measure mine. It makes me feel huge.
Remember these are the same people who are shorting gold, miners and every commodity out there. This is a very dangerous game they are playing out there. The government is either super stupid beyond anyone's belief or they are doing this on purpose to declare martial law.
it's actually insanely laughable. Everyone knows the actual absolute value of the GDP number is largely irrelevant because it can never be measured accurately nor can it measure all economic activity.
What is important is consistency in the way they calculate, even if there was a so-called bias in Q1, it wouldn't matter since all prior Q1's also have that bias.
The fact that they continually change the model reeks of desparation.
to be fair, a similar legerdemain did wonders for balance sheets back in 2009
we all recall FASB's mark to make beleive rule change, right?
http://www.wsj.com/articles/SB123867739560682309
I always said GDP was the most bullshit statistic ever.
Except of course for the unemployment number.
Unemplyment nubers are also fudged. You got to look at the out of the work force statistic if you want to find the real unemployment number. Its over one third right now.
Coupon rates are moving higher - Fed can't but anymore (overstuffed) and market demands larger returns.
So how does yellen explain this? Well with a growing economy. And if you don't have a growing economy, you make one up.
Wow is this ever going to get shitty.
Inflategate!!!!
All of your numbers are mined, bitches.... The only growth in the "mining" industry is found here as the Federallies dig for moar ponzi hope.
"Hope and Spare Change !" .... LOL .... Comedy Jihad World Tour !
Just more BS from the US Department of Commerce's Bureau of Economic Statistics.
The U.S. government and the Dederal Reserve have ALREADY lost all credibility!
How many times has the formula used to calculate the GDP been "adjusted"?
I will rely on the figures on John Williams' www.ShadowStats.com instead.
they'd never get away with this crap if theMSM wasn't the propaganda arm of the Dem party. example: Geo. Stephanopolis a Clinton/Dem operative posing as a "journalist" on ABC.
"Dumble Down" on a bad bet !
So basically, they're going to take the desired result then work backwards to get the equation (read adjustment) from reality to get there. I don't see a problem. Pass the QE, I be hongry after doing all of this God's work stuff.
Why not seasonally adjust the weather so you could sell beachfront condos on Lake Michigan to sun worshipers in December? There's money to be made!!