Economic data and financial news might be the most analyzed and,
at the same time, the least truly understood information in the news
today. For example, was the fact that China's economy continued to grow
good or bad news, and is its less than stellar performance positive or negative, and why? One analyst might report that China's
continued growth was indicative that there was still growing worldwide
demand, which should be good for the world's economies. At the same
time, other analysts saw this growth as occurring as a result of
the Chinese government pumping large infusions of monies into their
economy, and at the same time, artificially keeping the value of the
Chinese currency "cheaper" than it would be if it were permitted to be
freely traded on world markets. Still another economic analyst stated
that this growth is causing runaway inflation and an overheated economy,
that the analyst then referred to as "The flip side of the American
economic problems." As we later learned, some of the reported data may, or may not have been accurately reported or gathered, but isn't the real point, why, and how, we react to any sort of blip?
The economic analysts breathtakingly await the various weekly "reports," including the jobs reports (which should actually be referred to as the 1) Those submitting new preliminary unemployment applications; and 2) The official unemployment rate. Then, they argue about the numbers, which are invariably either better or worse than "expectations." Whose expectations, and why do we continue to refer to them if the actual numbers are almost either better or worse than anticipated? The official unemployment or joblessness rate is another curious number because it only includes those that are still actively searching for employment- that is, are presently collecting unemployment benefits. Therefore, this does not refer our count the under-employed, the consultants whose income have dwindled, commissioned salespersons incomes, or small business owners (who are ineligible for unemployment benefits). Many believe that the approximately r% official rate becomes closer to 10 or 11%, when these situations are also included.
The inflation rate, or the manner in which the Cost of Living rate are calculated is another controversial situation. If gas at the fuel pump, and home heating oil have risen dramatically, and airfares are significantly higher, and tolls and train fares have jumped, and food per ounce is significantly more money, am I the only one that wonders how the official inflation rate is stated as being very, very low, yet when oil prices dropped dramatically to current levels, our stock market is adversely affected, while nearly every consumer has benefited at the pump, and heating their homes. We argue about tax breaks, etc, but isn't a lower oil price, far more impactful than any tax change mentioned. Terms like seasonally adjusted, commonly used, essentials, non essentials, etc., further confuse the issue. Suffice it to say that I doubt there are too many people who believe any inflation number. Of course, for we conspiracy theorists, we might find it curious that the same government who has a vested interested in keeping the official numbers low (political, Social Security Indexing, government union contracts, etc), are also the ones that calculate this index.
One month we show improvement in housing starts or housing sold. Another month a drop. However, is this an increase or drop from what levels, and how long does a homeowner have to wait to have his home sold today versus a few years ago, and at what price point.
The point of this discussion is simply that we should all be cautious and beware when we see these financial and economic indexes and numbers. While they no doubt, may have some limited value, I question whether that value makes up for all the 'spin," confusion, and misinformation that we receive whenever any of this data is released.
The economic analysts breathtakingly await the various weekly "reports," including the jobs reports (which should actually be referred to as the 1) Those submitting new preliminary unemployment applications; and 2) The official unemployment rate. Then, they argue about the numbers, which are invariably either better or worse than "expectations." Whose expectations, and why do we continue to refer to them if the actual numbers are almost either better or worse than anticipated? The official unemployment or joblessness rate is another curious number because it only includes those that are still actively searching for employment- that is, are presently collecting unemployment benefits. Therefore, this does not refer our count the under-employed, the consultants whose income have dwindled, commissioned salespersons incomes, or small business owners (who are ineligible for unemployment benefits). Many believe that the approximately r% official rate becomes closer to 10 or 11%, when these situations are also included.
The inflation rate, or the manner in which the Cost of Living rate are calculated is another controversial situation. If gas at the fuel pump, and home heating oil have risen dramatically, and airfares are significantly higher, and tolls and train fares have jumped, and food per ounce is significantly more money, am I the only one that wonders how the official inflation rate is stated as being very, very low, yet when oil prices dropped dramatically to current levels, our stock market is adversely affected, while nearly every consumer has benefited at the pump, and heating their homes. We argue about tax breaks, etc, but isn't a lower oil price, far more impactful than any tax change mentioned. Terms like seasonally adjusted, commonly used, essentials, non essentials, etc., further confuse the issue. Suffice it to say that I doubt there are too many people who believe any inflation number. Of course, for we conspiracy theorists, we might find it curious that the same government who has a vested interested in keeping the official numbers low (political, Social Security Indexing, government union contracts, etc), are also the ones that calculate this index.
One month we show improvement in housing starts or housing sold. Another month a drop. However, is this an increase or drop from what levels, and how long does a homeowner have to wait to have his home sold today versus a few years ago, and at what price point.
The point of this discussion is simply that we should all be cautious and beware when we see these financial and economic indexes and numbers. While they no doubt, may have some limited value, I question whether that value makes up for all the 'spin," confusion, and misinformation that we receive whenever any of this data is released.
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