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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Mon, 01/04/2016 - 15:14 | 6996253 Soul Glow
Soul Glow's picture


Mon, 01/04/2016 - 15:16 | 6996272 El Oregonian
El Oregonian's picture

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

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

Mon, 01/04/2016 - 15:18 | 6996287 Looney
Looney's picture

10 years?

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


Mon, 01/04/2016 - 15:29 | 6996355 mtl4
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.

Mon, 01/04/2016 - 16:04 | 6996532 1000 splendid suns
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.

Mon, 01/04/2016 - 17:04 | 6996860 kralizec
kralizec's picture

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

Mon, 01/04/2016 - 18:02 | 6997133 BurningFuld
BurningFuld's picture

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

Tue, 01/05/2016 - 12:41 | 6999768 JRobby
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"
Mon, 01/04/2016 - 17:21 | 6996971 TheDanimal
TheDanimal's picture

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

Mon, 01/04/2016 - 16:39 | 6996717 asteroids
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.

Mon, 01/04/2016 - 15:20 | 6996309 undertow1141
undertow1141's picture

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

Mon, 01/04/2016 - 15:42 | 6996429 divingengineer
divingengineer's picture

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

Mon, 01/04/2016 - 15:57 | 6996505 MsCreant
MsCreant's picture

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

Mon, 01/04/2016 - 15:36 | 6996384 xrxs
xrxs's picture

Printing houses is actually a thing in 2016.

Mon, 01/04/2016 - 15:53 | 6996484 carbonmutant
Mon, 01/04/2016 - 19:08 | 6997374 Wulfkind
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)

Tue, 01/05/2016 - 02:09 | 6998582 Man-Bear-Pig
Mon, 01/04/2016 - 15:14 | 6996255 Glass Seagull
Glass Seagull's picture



Garbage in...

Economic miracles out.

Mon, 01/04/2016 - 16:01 | 6996517 Arnold
Arnold's picture

Three little letters:

Barney Frank.

Tue, 01/05/2016 - 12:48 | 6999869 JRobby
JRobby's picture

Barney Frank

Wood Chipper

Mon, 01/04/2016 - 15:15 | 6996263 NoWayJose
NoWayJose's picture

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

Mon, 01/04/2016 - 15:22 | 6996312 undertow1141
undertow1141's picture

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

Mon, 01/04/2016 - 15:17 | 6996275 NoWayJose
NoWayJose's picture

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

Mon, 01/04/2016 - 15:17 | 6996276 Bill of Rights
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 .

Mon, 01/04/2016 - 15:17 | 6996281 johngaltfla
johngaltfla's picture


You mean the BEA and government spewed lies and bullshit?

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

Mon, 01/04/2016 - 15:18 | 6996282 KnuckleDragger-X
KnuckleDragger-X's picture

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

Mon, 01/04/2016 - 15:20 | 6996304 MonetaryDigitalis
MonetaryDigitalis's picture

Soooo diligent.

Mon, 01/04/2016 - 15:20 | 6996307 blindman
blindman's picture

dual mandate anyone?

Mon, 01/04/2016 - 15:23 | 6996319 GeezerGeek
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.

Mon, 01/04/2016 - 15:23 | 6996323 RadioFlyer
RadioFlyer's picture

Just your standard unfucking.

Mon, 01/04/2016 - 15:23 | 6996325 Kaiser Sousa
Kaiser Sousa's picture

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


teach your children well...

Mon, 01/04/2016 - 15:59 | 6996514 Iam_Silverman
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.

Mon, 01/04/2016 - 18:07 | 6997145 BurningFuld
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.

Mon, 01/04/2016 - 15:25 | 6996336 brown_hornet
brown_hornet's picture

Is this just moar propaganda?

Mon, 01/04/2016 - 15:34 | 6996371 Sanity Bear
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?

Mon, 01/04/2016 - 15:34 | 6996372 JohnGaltsChild
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."

Tue, 01/05/2016 - 12:43 | 6999831 JRobby
JRobby's picture

Past 10 years? (Laugh Track Deafening)

Mon, 01/04/2016 - 15:37 | 6996396 Rainman
Rainman's picture

Heat is turning up over census bureau fraud/incompetence.


Mon, 01/04/2016 - 15:40 | 6996406 billbengen
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. 

Mon, 01/04/2016 - 15:41 | 6996418 LawsofPhysics
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!!!!

Mon, 01/04/2016 - 15:41 | 6996422 T-NUTZ
T-NUTZ's picture

See!   It's not Yellen's fault. 

Mon, 01/04/2016 - 15:42 | 6996427 U4 eee aaa
U4 eee aaa's picture


This is too funny!

Make it up at the end (of the) game

Mon, 01/04/2016 - 15:51 | 6996481 MsCreant
MsCreant's picture

Tip the board over and all the pieces.

Mon, 01/04/2016 - 15:46 | 6996451 Grandad Grumps
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.

Mon, 01/04/2016 - 15:49 | 6996469 Strelnikov
Strelnikov's picture

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

Mon, 01/04/2016 - 15:50 | 6996474 carbonmutant
carbonmutant's picture

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

Mon, 01/04/2016 - 15:58 | 6996510 undertow1141
undertow1141's picture

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

Mon, 01/04/2016 - 16:23 | 6996615 optimator
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!

Mon, 01/04/2016 - 15:50 | 6996475 MsCreant
MsCreant's picture

Can these people be sued?

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

Tue, 01/05/2016 - 12:46 | 6999852 JRobby
JRobby's picture

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

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