I’d like to see hopefully a Trump administration change the reporting of job numbers. Maybe they could give it to two or three separate firms so that it would make massaging the numbers difficult. The the reporting has become so political, it’s just BS
So then, take the average? Or throw out the high and the low number by using the midpoint? The suggestion in my estimation merely adds to the problematic nature of data transparency and its usefulness.
Experience with the govt--whether official statements, or data reporting--appears problematic due to heightened attention via instantaneous media reporting. While much of the reporting, now principally about expectations, is often silly. Political? Yes. (On the other hand, the film "Trading Places" may have been more accurate than anyone cares to acknowledge. Behind the facade of respectability, the commodities broker Duke & Duke were just as ruthless, petty, and ambitious as humanly typical.)
And much changes with the passage of time--who remembers the significance and importance given to the prime rate? A piece of banking data completely ignored today. Many other examples abound.
Data that is officially recognized as partial, intermediate, and to be updated with revision, while based on estimates, is very likely subject to manipulation and should be taken with a grain of salt.
The govt can't hardly be at fault for what the broad public does with the information. That the revisions only (or regularly) go in one direction is a statement about the data collected and its source, and the estimation methods employed.
The dilemma used to be called paralysis by analysis. Now, inundated with a flood of data the public cannot keep its head above water. But, to mix metaphors, that's a wheat and chaff problem.
Statistical measures are a core interest of the government. Outsourcing key functions makes for dumber, more expensive government. Outsourcing these tasks would get some McKinsey fiasco.
Has it's always been political and we just haven't noticed before or it's hasn't been to the same extent?
The discrepancies were probably small enough that private sector analysis could work around those discrepancies- might not be the case any longer.
It would seem that what we really need is private sector data collection/reporting services to better inform analysis. Such private collection services would have been cost prohibitive at one time - but is that still the case?
I remember on the floor when we found out some paying customers had Michigan Sentiment minutes before the number came out.....as long as the information was released equitably and evenly, it can work. Especially in today's marketplace. Our government numbers on just about everything aren't as reliable today.
"Inflation is a money creation problem, not a private market supply/demand problem. If the government cut spending, inflation would go away. See Argentina."
Why can't anyone in government/the Fed comprehend this? It's as evident as the nose on someone's face. Broken schools.
I believe five of the seven Fed governors were appointed by Democrats. I could have told you six months ago they would cut the interest rates just before the election in an effort to goose the market higher to make the incumbent President and his party look better. So it has always been, and always will be. Economics only provides a smokescreen for this move.
"Inflation is a money creation problem (government failure), not private market supply/demand problem"
David Henderson just wrote a good piece about government reporting government failure but dressing the failure as "market failure" related to affordable housing.
It would seem that data related to economic performance is a product/service just like any other product and service. It would also seem that private sector analysis has been willing heretofore to outsource this data collection to THE GOVERNMENT. Perhaps it's time to reconsider the vendor of choice.
I was looking at buying property in a US region where nearly all of several counties won’t allow subdividing less than 25-30 acres per homesite. Seriously. And the locals and their pols are bemoaning the fact that the median age is somewhere around 50 years old and increasing. So several counties are effectively retirement communities. There are labor shortages because young people obviously can’t afford 30 acre lots. But incumbent residents like the aesthetics of the huge lots in their ‘hood and nobody is proposing increasing the zoning density.
There is a cost to unincorporated housing. more roads to maintain, more policing, more rural traffic, more schools, more busses, etc. etc. Density in incorporated areas where sewer and water are available and city (some) services are available i.e. density is generally a better answer.
The 20 acre lot zoning is counties answer to sprawl. It ain't perfect, but it works.
NSA*, the jump in “Not In Labor Force” (+1,171,000) points to Stagflation, but it being Fiscal, not Monetary, to me at least. The spread of native born vs foreign born job payrolls reinforces this.
*NSA = “Non-Seasonally Adjusted” (been watching this for years, always worthwhile, especially after unavoidable COVID data skews)
Tweet on said spread::
Kevin Gordon @KevRGordon
Since 2020, no growth in the native-born labor force ... foreign-born labor force growth is soaring
America has a gigantic social safety net. We pay people not to work. America also has a terrible public school system run by the Teacher's Union. We don't train people to have critical thinking skills.
At this point we have decreased our jobs number by almost 1 million. Here is the scene inside the BLS- Okay, we need to make sure we time this right, get the economy tanked in case Trump wins and if he loses, we can re-adjust the numbers to suddenly pretend those jobs showed back up.
It seems like for the past 10 - 12 years the congress and the executive have tried to fob the mess off on the fed. "Here, let them deal with it." A sleight of hand on the American public as if they weren't responsible for the spending and budgeting. Continuing resolutions instead of budgets. Executive orders and spending by fiat. Fiscal responsibility be damned.
Great post. Let me add to your last comment: while inflation is "always and everywhere a monetary phenomenon," it's also too much money chasing too few goods. Increasing the supply of goods, ceteris paribus, will bring down inflation. This happened in the 1980s as there were massive supply-side incentives unleashed.
I’d like to see hopefully a Trump administration change the reporting of job numbers. Maybe they could give it to two or three separate firms so that it would make massaging the numbers difficult. The the reporting has become so political, it’s just BS
-->"give it to two or three separate firms..."
So then, take the average? Or throw out the high and the low number by using the midpoint? The suggestion in my estimation merely adds to the problematic nature of data transparency and its usefulness.
Experience with the govt--whether official statements, or data reporting--appears problematic due to heightened attention via instantaneous media reporting. While much of the reporting, now principally about expectations, is often silly. Political? Yes. (On the other hand, the film "Trading Places" may have been more accurate than anyone cares to acknowledge. Behind the facade of respectability, the commodities broker Duke & Duke were just as ruthless, petty, and ambitious as humanly typical.)
And much changes with the passage of time--who remembers the significance and importance given to the prime rate? A piece of banking data completely ignored today. Many other examples abound.
Data that is officially recognized as partial, intermediate, and to be updated with revision, while based on estimates, is very likely subject to manipulation and should be taken with a grain of salt.
The govt can't hardly be at fault for what the broad public does with the information. That the revisions only (or regularly) go in one direction is a statement about the data collected and its source, and the estimation methods employed.
The dilemma used to be called paralysis by analysis. Now, inundated with a flood of data the public cannot keep its head above water. But, to mix metaphors, that's a wheat and chaff problem.
The BLS is not manipulating numbers. What any admin should do is to better fund statistical agencies. The statistics are important!
Ah yes, throw more money at it😎
It's hard to make good decisions without good data. Funding these agencies should be non-controversial across the ideological spectrum. This report is a fairly easy read: https://www.amstat.org/policy-and-advocacy/the-nation's-data-at-risk-meeting-american's-information-needs-for-the-21st-century
Private industry can do it better.
Statistical measures are a core interest of the government. Outsourcing key functions makes for dumber, more expensive government. Outsourcing these tasks would get some McKinsey fiasco.
Has it's always been political and we just haven't noticed before or it's hasn't been to the same extent?
The discrepancies were probably small enough that private sector analysis could work around those discrepancies- might not be the case any longer.
It would seem that what we really need is private sector data collection/reporting services to better inform analysis. Such private collection services would have been cost prohibitive at one time - but is that still the case?
I remember on the floor when we found out some paying customers had Michigan Sentiment minutes before the number came out.....as long as the information was released equitably and evenly, it can work. Especially in today's marketplace. Our government numbers on just about everything aren't as reliable today.
"Inflation is a money creation problem, not a private market supply/demand problem. If the government cut spending, inflation would go away. See Argentina."
Why can't anyone in government/the Fed comprehend this? It's as evident as the nose on someone's face. Broken schools.
doesn't work on the centralized government academic chalkboard
Viva la Chainsaw Revolution!
I believe five of the seven Fed governors were appointed by Democrats. I could have told you six months ago they would cut the interest rates just before the election in an effort to goose the market higher to make the incumbent President and his party look better. So it has always been, and always will be. Economics only provides a smokescreen for this move.
The current economic environment may not be an exact repeat of the 1970's but it sure seems as if it rhymes. Stagflation anyone?
"Inflation is a money creation problem (government failure), not private market supply/demand problem"
David Henderson just wrote a good piece about government reporting government failure but dressing the failure as "market failure" related to affordable housing.
It would seem that data related to economic performance is a product/service just like any other product and service. It would also seem that private sector analysis has been willing heretofore to outsource this data collection to THE GOVERNMENT. Perhaps it's time to reconsider the vendor of choice.
Link to Henderson piece on housing
https://open.substack.com/pub/davidrhenderson/p/does-government-ever-fail?r=qbtur&utm_medium=ios
I was looking at buying property in a US region where nearly all of several counties won’t allow subdividing less than 25-30 acres per homesite. Seriously. And the locals and their pols are bemoaning the fact that the median age is somewhere around 50 years old and increasing. So several counties are effectively retirement communities. There are labor shortages because young people obviously can’t afford 30 acre lots. But incumbent residents like the aesthetics of the huge lots in their ‘hood and nobody is proposing increasing the zoning density.
Gee, what could be the problem there?
There is a cost to unincorporated housing. more roads to maintain, more policing, more rural traffic, more schools, more busses, etc. etc. Density in incorporated areas where sewer and water are available and city (some) services are available i.e. density is generally a better answer.
The 20 acre lot zoning is counties answer to sprawl. It ain't perfect, but it works.
NSA*, the jump in “Not In Labor Force” (+1,171,000) points to Stagflation, but it being Fiscal, not Monetary, to me at least. The spread of native born vs foreign born job payrolls reinforces this.
*NSA = “Non-Seasonally Adjusted” (been watching this for years, always worthwhile, especially after unavoidable COVID data skews)
Tweet on said spread::
Kevin Gordon @KevRGordon
Since 2020, no growth in the native-born labor force ... foreign-born labor force growth is soaring
https://twitter.com/KevRGordon/status/1832040888740020258
(Scary chart at link)
America has a gigantic social safety net. We pay people not to work. America also has a terrible public school system run by the Teacher's Union. We don't train people to have critical thinking skills.
At this point we have decreased our jobs number by almost 1 million. Here is the scene inside the BLS- Okay, we need to make sure we time this right, get the economy tanked in case Trump wins and if he loses, we can re-adjust the numbers to suddenly pretend those jobs showed back up.
It seems like for the past 10 - 12 years the congress and the executive have tried to fob the mess off on the fed. "Here, let them deal with it." A sleight of hand on the American public as if they weren't responsible for the spending and budgeting. Continuing resolutions instead of budgets. Executive orders and spending by fiat. Fiscal responsibility be damned.
Great post. Let me add to your last comment: while inflation is "always and everywhere a monetary phenomenon," it's also too much money chasing too few goods. Increasing the supply of goods, ceteris paribus, will bring down inflation. This happened in the 1980s as there were massive supply-side incentives unleashed.
Do smart traders "bake-in" the later downward corrections of every jobs report and trade accordingly? Might be prudent.
I don't know. When I traded on the floor, it was impossible to do things like that without a ton of capital to hold positions through the volatility.
“Buy the rumor, sell the fact.”
Now where have I heard that before….
Oh, and be short vol wide enough so gamma doesn’t take all your money.
(Ran Treasury option desk at CBOT vs than CME's Eurodollar Contract structure.)