Government statistics - money supply, inflation, GDP, unemployment

Government tweaks the formulas for calculating their metrics so it's difficult to compare current indices against historical data. Fortunately John Williams (not the music composer) compiles the stats using the original/traditional formulas:

http://www.shadowstats.com/alternate_data

Money Supply

The Fed ceased publishing M-3, its broadest money supply measure, in March 2006. The SGS M-3 Continuation estimates current M-3 based on ongoing Fed reporting of M-3’s largest components (M-2, institutional money funds and partial large time deposits) and proprietary modeling of the balance.

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Inflation

The CPI chart on the home page reflects our estimate of inflation for today as if it were calculated the same way it was in 1990. The CPI on the Alternate Data Series tab here reflects the CPI as if it were calculated using the methodologies in place in 1980. In general terms, methodological shifts in government reporting have depressed reported inflation, moving the concept of the CPI away from being a measure of the cost of living needed to maintain a constant standard of living.

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Unemployment

The seasonally-adjusted SGS Alternate Unemployment Rate reflects current unemployment reporting methodology adjusted for SGS-estimated long-term discouraged workers, who were defined out of official existence in 1994. That estimate is added to the BLS estimate of U-6 unemployment, which includes short-term discouraged workers.

The U-3 unemployment rate is the monthly headline number. The U-6 unemployment rate is the Bureau of Labor Statistics’ (BLS) broadest unemployment measure, including short-term discouraged and other marginally-attached workers as well as those forced to work part-time because they cannot find full-time employment.

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GDP

The SGS-Alternate GDP reflects the inflation-adjusted, or real, year-to-year GDP change, adjusted for distortions in government inflation usage and methodological changes that have resulted in a built-in upside bias to official reporting.

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The cost of a Thanksgiving dinner in the U.S. will jump 13 percent this year, the biggest gain in two decades, as prices rose for everything from turkey to green peas to milk, the American Farm Bureau Federation said.

A meal for 10 people on the holiday, which falls on Nov. 24 this year, will rise to $49.20 from $43.47 last year, the biggest increase since 1990, based on foods traditionally served including stuffing and pumpkin pie, the farm group said today in a release. Turkey was the most expensive and had the biggest gain, with a 16-pound bird up 22 percent at $21.57.

“Our informal survey is a good barometer of the rising trend in food prices this year,” John Anderson, a senior economist at the Farm Bureau in Washington, said in a telephone interview. “We are starting to see the supply response to higher prices, but there are substantial lags.”
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http://www.bloomberg.com/news/2011-11-10/thanksgiving-meal-cost-jumps-13-.html

13% inflation in the Thanksgiving Day meal cost index mirrors very closely the SGS Alternate figure.

The government has various reasons to want to cook their books, and being humans, they succumb to temptation quite readily.

For one thing, negative news be very self-fulfilling, as in "the only thing we have to fear is fear itself". There's a long record of that one.

Further, their entitlement payouts are determined by the cost of living they compute, and admitting it's bad would mean more payouts from a government that already has money problems. So you can count on their numbers being more or less baloney.

I noticed the food issue awhile back, as I'm the shopper and the chef here. It's one reason I pulled my food demand forward and built up a food stash. It's an investment! It's doing a lot better than the markets as a whole, after all, and this way I have a big stash of food locked in - same idea and motivation as holding a PM in phyzz form.

Also, when you start thinking like that, those deals at the store of "get a case at a big discount" no longer seem so stupid...though the fact that the portions in the packing tend to be too big is a pain - you want to be selective doing that.

The election is over, now unemployment numbers are moving back up. Of course, Sandy has to take the blame:
http://www.bloomberg.com/news/2012-...ast-week-as-sandy-damaged-u-s-job-market.html

Bwahahahahaa:

A year ago it was the US which first "boosted" America's GDP by $500 billion - literally out of thin air - when it arbitrarily decided to include "intangibles" to the components that 'make up' GDP (in the process cutting over 5% from the US Debt/GDP ratio). Then Spain joined the fray. Then Greece. Then the UK. Then Nigeria, which showed those deveoped Keynesian basket cases how it is really done, when it doubled the size of its GDP overnight when it decided to change the base year of its GDP calculations. Now it is Italy's turn, and like everything else Italy does, this latest "revision" of the definition of GDP easily wins in the style points category. As Bloomberg reports, "Italy will include prostitution and illegal drug sales in the gross domestic product calculation this year." Yup: blow and hookers. And that, ladies and gents, how it's done.
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http://www.zerohedge.com/news/2014-...anging-definition-gdp-officially-jumped-shark

Sometimes you just have to laugh at the sheer audacity of them all. Classic.

Ho Ho Ho (pun intended):

First it was Italy which, as we reported last week, had decided to "boost" its GDP by adding the estimated impact of cocaine and hookers. And now, riding on the coattails of this economics gimmick designed solely to make the economy appear more solvent, it is Britain's turn, whose Office for National Statistics will also add add up the "contribution" made by prostitutes and drug dealers.

According to the Guardian "for the first time official statisticians are measuring the value to the UK economy of sex work and drug dealing – and they have discovered these unsavoury hidden-economy trades make roughly the same contribution as farming – and only slightly less than book and newspaper publishers added together."
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More: http://www.zerohedge.com/news/2014-...oost-60879-prostitutes-x-25-clients-week-x-£6

the value to the UK economy of sex work and drug dealing trades make roughly the same contribution as farming .........

Arent farmers part of the drug trade ?

Perhaps they need more hoes (-;

The brilliant part of it is that there are components now which are pure "guesses". They can make up whatever numbers they want for those line items. Makes it easy to massage the final result as desired.

Dont shadowstats look at non gov commercial activity to try and assess real economic activity ? The stuff that creats real jobs and pays tax to support all the gov created non activity

Putting black market activity into the numbers game, kind of, makes sense though because its an attempt at working out real unemployment.

I am informed that a lot of young people in spain have black economy jobs and that the real youth unemployment figures are not as bad as we are told ....

rblong2us said:

Dont shadowstats look at non gov commercial activity to try and assess real economic activity ? ....

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See first post. Mr. Williams uses the same criteria/formula that the government used decades ago.

ah !

thought I read that somewhere ...

but it was 2.5 years ago (-: