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Economists Raise Questions About Quality of U.S. Inflation Data
"The Bureau of Labor Statistics, the office that publishes the inflation rate, told outside economists this week that a hiring freeze at the agency was forcing the survey to cut back on the number of businesses where it checks prices. In last month’s inflation report, which examined prices in April, government statisticians had to use a less precise method for guessing price changes more extensively than they did in the past."
"Economists say the staffing shortage raises questions about the quality of recent and coming inflation reports. There is no sign of an intentional effort to publish false or misleading statistics. But any problems with the data could have major implications for the economy."
There are (at least) two different concerns raised here:
1) Staffing shortages in the federal government (not just in BLS) affect the ability of the government to do its job. Ditto @crash 's comment.
2) Lower sampling of data (whether price data as here or other data in different arenas) increases the uncertainty in the accuracy of the average of the samples. Sampling is never exact. (Well, unless you "sample" 100% of the data points.)
The fewer the number of samples taken, the greater the uncertainty. One often hears of polls reporting some result +/- a couple of percent. Those polls also report a certain level of confidence, typically 95%. That means that 95% of the time such a sampling it taken, the true average falls within the +/- range of the sample's average. https://www.scribbr.com/statistics/confidence-interval/
Take fewer samples, fill in the gaps differently, and that uncertainty range increases. Though taking fewer samples doesn't necessarily skew the sampling result one way or the other. Hence the decrease in quality (accuracy) as reported, but not bias.
Detmeister said it is impossible to tell whether the reliance on different-cell estimates [gap-filling] skewed the data in one direction or the other.
“When you take a sample and reduce the numbers, it’s going to increase the sampling error.”
As I said elsewhere, it's getting to the point where we're not going to be able to trust economic data released by the US government -- either due to the effects of 'DOGE' and the blind downsizing of government offices in recent months or it might get influenced/interfered with by political appointees who don't want the reported numbers/data/analysis to present a contrary statement against the desired political narrative of Emperor Hirocheeto and his political hacks.
Best of Mao and Putin, rolled into one. And I love what he's doing to the Oval Office decor.
Gold trim and self-portraits everywhere? That's not tacky at all. Nope.
A few side notes from today's BLS Employment Report: The ratio of employed workers to the total population fell to 59.7%, the lowest rate since the pandemic.
An alternative measure of unemployment that includes "discouraged" workers, or those who have stopped looking for work, returned to a post-pandemic high of 4.5%.
Lots of predictions, worries, noise and more. The actual data is pretty good, with PCE = 2.1 (lowest in 4 year) + CPI=2.3(lowest in 3 year) + Nonfarm employment chugging along with lower Gov employees in the last several months.
The SP500 is up over 1% at 10.30 AM and positive for the year. VGK=Europe + VXUS are doing much better YTD Invest in the market you have, not the one you worry/predict you have.
I guess that you missed the point of the OP. The "actual data" is suspect because of massive governmental layoffs. Some folks, knowing the cost of everything and the value of nothing, seem to think that you can get something of value without paying for it.
I didn't miss a thing. I don't pay attention to worries and predictions, only to actual data. You can doubt everything. It's your choice. Economists are far from being accurate for decades.
A vacuum is when hundreds of posts and media publications called for higher inflation in the last 4-5 months, and...the results are the opposite. We are getting into politics. I will stay out now.
As I said elsewhere, it's getting to the point where we're not going to be able to trust economic data released by the US government -- either due to the effects of 'DOGE' and the blind downsizing of government offices in recent months or it might get influenced/interfered with by political appointees who don't want the reported numbers/data/analysis to present a contrary statement against the desired political narrative of Emperor Hirocheeto and his political hacks.
"Trump administration officials delayed and redacted a government forecast because it predicts an increase in the nation’s trade deficit in farm goods later this year."
No need to predict anything, the 2025 GDP numbers will tell the tale. Way too early to assess the impacts of the many substantial changes. The data will reveal all, everything from trade deficits to budget deficits.
At the current time, and with no substantial change in tactics in the offing, the mere fact of the on-again-off-again, back and forth economic fickleness by the Orange regime might very well be the biggest obstacle to overcome in order to plan financially for business and the individual, too. To say nothing of supply-chain work-arounds designed to AVOID the US, and our regrettable loss of standing on the world stage. Surely, the FED will not be cutting rates in the midst of such chaos. Fewer imports will surely lead to inflation. Unless TACO Man capitulates completely and stops with the seriously naive and silly pronouncements and policies. Investing is about planning for the FUTURE, not reveling in some gratifying statistic-of-the-day. That's what Mr. Market is always preoccupied about. Let "him" do that.
Comments
1) Staffing shortages in the federal government (not just in BLS) affect the ability of the government to do its job. Ditto @crash 's comment.
2) Lower sampling of data (whether price data as here or other data in different arenas) increases the uncertainty in the accuracy of the average of the samples. Sampling is never exact. (Well, unless you "sample" 100% of the data points.)
The fewer the number of samples taken, the greater the uncertainty. One often hears of polls reporting some result +/- a couple of percent. Those polls also report a certain level of confidence, typically 95%. That means that 95% of the time such a sampling it taken, the true average falls within the +/- range of the sample's average.
https://www.scribbr.com/statistics/confidence-interval/
Take fewer samples, fill in the gaps differently, and that uncertainty range increases. Though taking fewer samples doesn't necessarily skew the sampling result one way or the other. Hence the decrease in quality (accuracy) as reported, but not bias.
A few side notes from today's BLS Employment Report:
The ratio of employed workers to the total population fell to 59.7%, the lowest rate since the pandemic.
An alternative measure of unemployment that includes "discouraged" workers, or those who have stopped looking for work, returned to a post-pandemic high of 4.5%.
The actual data is pretty good, with PCE = 2.1 (lowest in 4 year) + CPI=2.3(lowest in 3 year) + Nonfarm employment chugging along with lower Gov employees in the last several months.
The SP500 is up over 1% at 10.30 AM and positive for the year.
VGK=Europe + VXUS are doing much better YTD
Invest in the market you have, not the one you worry/predict you have.
You can doubt everything. It's your choice.
Economists are far from being accurate for decades.
We are getting into politics. I will stay out now.
"Trump administration officials delayed and redacted a government forecast because it predicts an increase in the nation’s trade deficit in farm goods later this year."