US Government Discovers 10 Years Of "Processing Errors" In Construction Spending Data Slamming GDP

Tyler Durden's picture

Even as increasingly more parts of the economy, especially those with exposure to manufacturing and industrial production, sink into the recessionary quicksand, one sector that was seen as immune from the malaise gripping US manufacturing and was outperforming the overall growth rate of the US economy, was housing, and specifically spending on private and public construction: a direct input into the GDP model.

That all changed today when the US Census released its latest, November, construction spending data, which not only missed expectations of a 0.6% increase, but tumbled -0.4%, the most since June of 2014, while all the recent changes were mysteriously revised lower.

And then the source of the mystery was revealed: in the fine print of the release, the government made a rare admission: all the construction spending data for the past 10 years had been "erroneous."

In the November 2015 press release, monthly and annual estimates for private residential, total private, total residential and total construction spending for January 2005 through October 2015 have been revised to correct a processing error in the tabulation of data on private residential improvement spending. An Excel file containg all of the revisions can be found here

The result of the "revision" of the processing error is shown below: every month starting with April and going through October, was "found" to have been a lower increase than according to the previous data. Not only that, but the October print which had been the strongest since May, confounding many data watchers as it did not fit with anecdotal evidence of a dramatic slowdown in energy-related construction, suddenly was barely positive, leading to the November sequential decline, the worst since the -0.7% drop in June of 2014.

 

And here is the big picture: what it reveals is that while spending data in 2013 was revised substantially higher, it proves what many have known, namely that the economy is now slowing substantially and that what until recently was seen as the strong annual increase in construction spending, namely the 14.3% increase of September 2015, was in fact substantially lower.

The result is that the October Y/Y% change of 10.5%, and declining, is not only the lowest increase since April, but matches the level first reported in December 2013. In other words, contrary to the previous narrative suggesting construction spending was solid and supporting a growing economy, it has in fact been declining since June!

And to think of the tons of digital ink spent by "strategists" and experts analyzing construction spending "data" in the past 5 years...

Sarcasm aside, what this exercise proves - which is clearly meant to lower the goalseeked glideslope of the US economy and make it easier to enter recession - is what many have already said, namely that Yellen clearly missed her window to hike rates with the economy now clearly slowing down, and instead of tightening monetary conditions, Yellen should be easing and preparing to lower rates.

To be sure, this is not the first time the US government has slashed historical data on a wholesale basis due to "revisions" and "errors" - recall our post from December 2014 "The Housing Recovery Remains Cancelled Due To 6 Months Of Downward Revisions" in which we showed how 6 months of New Home Sales were quietly revised materially and, of course, to the downside.

 

And since as noted above, this data feeds straight into the GDP "beancounts", we expect substantial downward revisions of recent historical GDP data, which will once again confirm Yellen's rate hike error.

Finally, we now await for even more government data (perhaps payrolls is next) to "unexpectedly" be shown as having substantial historical errors, and be revised, like in the cases above, materially to the downside because it will look silly if the US economy jumps from growth straight into recession with existing "data sets" which reveal that the bulk of what passes for "data" at the US government is simply double and triple-seasonally adjusted GIGO.

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Soul Glow's picture

PRINT MOAR HOUSES!

El Oregonian's picture

all the construction spending data for the past 10 years had been "erroneous."

Yeah, and?.... Maybe like... EVERYTHING ELSE!!!!

Looney's picture

10 years?

Let’s pull the “It’s Bush’s fault!” rabbit out of the hat! ;-)

Looney

mtl4's picture

This train is like the Polar Express, if we can just get them to believe then everyone will live happily ever after.........curse those darn cracks in the dam.

1000 splendid suns's picture

When things get really ugly, it's a great time to air out all the dirty laundry that you can.

Uncle Sam cooks the books.

kralizec's picture

They cook up shit all the time and sheeple think it smells like fresh oats...why is today any different?

BurningFuld's picture

This is what happens when you spend too much time watching porn and not enough time checking data.

JRobby's picture

"We recruite only the best and brightest from the best schools and best connected families who's inbreeding is a proven source of great leadership material"

 

 

As I write this I have barricaded myself in the ward room against the 2nd Lieutenant who claims he is "God's little hang boy sent special to me" that fucking shave tail I can hear him out there whimpering and slobbering and the Colonel is jacking off in front of the window pointing to a Gemini Sex Skin. The Captain 's corpse hangs naked at the flagpole. I am the only sane man left on the he post. I know now when it is too late what we are up against

William S. Burroughs - "The Ticket that Exploded"
TheDanimal's picture

I think it's more like snowpiercer. If you haven't seen it, you should.

asteroids's picture

Interesting point. In April of Bush's last year similar revelations came out. It's about the time all his senior staff started to jump ship and the lessor rats recognised they could come clean without retribution. Expect Obozo's staff to start retiring sometime soon.

undertow1141's picture

Shhh don't tell them we're on to them already.

divingengineer's picture

Refreshing admission, too bad it means we're fucked even more.

MsCreant's picture

China is the only one that lies. Us, we just make errors...

xrxs's picture

Printing houses is actually a thing in 2016.

Wulfkind's picture

"And then the source of the mystery was revealed: in the fine print of the release, the government made a rare admission: all the construction spending data for the past 10 years had been "erroneous.""  ....on purpose (FIFY)


Glass Seagull's picture

 

 

Garbage in...

Economic miracles out.

Arnold's picture

Three little letters:

Barney Frank.

JRobby's picture

Barney Frank

Wood Chipper

NoWayJose's picture

Gotta go back 10 years - so they can blame Bush!

undertow1141's picture

Funny how the divergence happens in 2011, not quite 10 years ago, but it makes blaming Bush#2 easier.

NoWayJose's picture

It's not like they were trying to 'juice' the data to drive stocks higher, was it?

Bill of Rights's picture

See how slow the government operates, it took 10 years to discover an error in the books. Yet when it comes to Tyranny the government can get it done in 24 hours, funny stuff.

This place sure needs an enema .

johngaltfla's picture

LOLOLOLOLOLOLOL!

You mean the BEA and government spewed lies and bullshit?

Say it isn't so!?!?!?!?

KnuckleDragger-X's picture

Their information incorrect for a decade? UNPOSSIBLE !!! Everybody knows government models NEVER fuck up.......

blindman's picture

dual mandate anyone?

GeezerGeek's picture

We GIGO's some folks.

Actually, the government excels in taking good data and turning it into garbage. Remember, in a pinch it's all right to lie.

RadioFlyer's picture

Just your standard unfucking.

Kaiser Sousa's picture

here's the ist thing Ameridumbs should understand about their MoneyChanger controlled government....

EVERYTHING THEY TELL U IS A FUCKING LIE.....

teach your children well...

Iam_Silverman's picture

"here's the ist thing Ameridumbs should understand about their MoneyChanger controlled government...."

 

Oh, I think that most know or suspect that the information is false.  But why should 90% of the population even care?  Honestly, how does it affect the person who doesn't dabble in stocks or bonds (or whose 401K is funneled into a target-date fund)?  Does it affect the price of their lottery ticket?  Their rent or gas prices?  Not directly, so why even bother getting all worked up over something you wouldn't have any control over anyway?  Those numbers were generated to trick the "elites" who can afford to dabble in the equities casino and maybe some ETF's or REIT's.

BurningFuld's picture

Well the performance of the US economy has rather far reaching consequences for the value of the US  Dollar AND the price of Gold (Confidence in said dollar) If planet earth knew the US economy was a complete sham-wow that could be a small problem.

brown_hornet's picture

Is this just moar propaganda?

Sanity Bear's picture

You mean, are these numbers the best they could fake after getting caught the first time? Probably.

 

The open question is what got them to admit these errors... was it that faking current data became too difficult without at least partially correcting the record?

JohnGaltsChild's picture

"all the construction spending data for the past 10 years had been "erroneous."

 

NEWS FLASH! ......all the data coming out of Washington DC for the past 10 years had been "erroneous."

JRobby's picture

Past 10 years? (Laugh Track Deafening)

billbengen's picture

Q. Whose house did I see you in last night?

A. That was no house, that was my revised construction spending data. 

LawsofPhysics's picture

In terms of money and accounting realitive to reality, everything since 1971 has been bullshit...

Off with the bankers/financiers heads!!!  Stone to death all their political puppets!!!!

T-NUTZ's picture

See!   It's not Yellen's fault. 

U4 eee aaa's picture

HA! HA! HA!

This is too funny!

Make it up at the end (of the) game

MsCreant's picture

Tip the board over and all the pieces.

Grandad Grumps's picture

If the purpose of these exercises is to give us less confidence in the US government's capability and integrity, then I am sorry to say that you are too late. All hope for capability and integrity from the US government is long gone.

Strelnikov's picture

Well, they'll just have to revise that shit again.

carbonmutant's picture

I can't wait till we see the real BLS numbers...

undertow1141's picture

Oh that number is already out, its called U-6. They don't mention it.

optimator's picture

I wonder if their inflation indicator has also been understated for then years?  If so then the social security clan will get a big check based on the real numbers, coumpounted of course.  Bwwwwwwwwwahhhhhaa!

MsCreant's picture

Can these people be sued?

If I was a trader, I'd be beyond pissed about this.

JRobby's picture

In a moment of madness and despair he thought of suing the government (Laugh Track Deafening)