Part of our point is we've for years been questioning much of the authenticity of the Fed's numbers. Job numbers and the old NROU, natural rate of unemployment a case in point. Questioning is the kind term, deliberate doctoring another.
Part of our skepticism stems for our own personal experience with big, centralized government, cases where you know the data is inaccurate. We won't bore you with examples other than to say if someone has been dead and officially witnessed and buried for years but keeps popping up in quarterly government reports as being alive, that might be an indication.
We could cite numerous others like the number of man hours lost by government employees owing to work injuries. Regular reports get sent to Washington. If those numbers got any more doctored they'd be a patented medicine. You might find it hard to believe that an injured worker is forced to come into work and lay on a cot in his or her supervisor's office for eight hours so that month's report can be sent in with zero lost man hours.
Yea, we're discussing the good old USA. So despite what you might think, it's hardly a stretch to suspect economic data goes undoctored. The surprise would be if it didn't go undoctored. So here's another point on the same subject. Like a lot of people you feel a little lonely out there, maybe from time to time even a little guilty thinking such suspicious thoughts.
But as it's been noted a long time ago, facts are stubborn things. Here's a piece by someone else we don't even know.
dailyspeculations.com/wordpress/?p=11000
Bill Rafter and I have discussed for years the steadily growing discontinuity in the BLS's employment data versus that implied by payroll tax receipts.
A few years ago the staff economists at the Atlanta Fed got so fed up with the nonsensical BEA GDP reports that they started issuing their own report anticipating the GDP release with their GDPNow report.
Although the media has since glommed onto the report it is treated in similar fashion to the ADP employment release.
The differences between the two is important however.
The ADP report is distinct from the BLS data and uses inputs chosen by ADP.
The GDPNow report is designed to mirror the BEA's data inputs to anticipate not what what GDP is but what the BEA will report that it is.
The Atlanta Fed staff are putting the manipulators on notice, and those in the media and at the FOMC willing to go along with it, that there are consequences.
The actions by the Atlanta Fed staff have also helped to embolden other Fed staff members to do similar work and make it public.
The Richmond Fed staff economists have now produced a model of unemployment called the non-employment index that challenges the accuracy of the BLS data.
The importance of this is that it challenges the usefulness of the U3 unemployment rate and the FOMC natural rate of unemployment (NROU) predicated on it.
The point is that data is being willfully corrupted by providers and this has engendered, finally, a push back by others.
Being aware of the totality of this, especially for a group focused on clean data is important.
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