The Fed is using a wonderful Hansenian statistical technique which keeps our economy in a perpetual state of increasing improvement. This is pretty nice, because we all know an ‘always improving’ economy is good for all of us.
As we all know, our earth is always getting warmer. Much of this is achieved by making the past cooler. Apparently the government liked this approach so much, they’ve decided to employ this in an effort to fix our economy.
….a second reading on U.S. gross domestic product showed the economy expanded at an annualized rate of 1.9% in the first quarter, in line with economists’ estimates, but slower than an initial estimate of 2.2%.
Initial claims for state unemployment benefits rose 10,000 to a seasonally adjusted 383,000, the Labor Department said on Thursday.
The prior week’s figure was revised up to 373,000 from the previously reported 370,000. Economists polled by Reuters had forecast claims unchanged last week.
The problem with this approach is that they are clearly not revising hard enough. If they were to revise the GDP down to 0% growth, then the next quarter would be hailed as great news even if the GDP only grew at an annualized rate of 1%! And, if they just adjust the unemployment up to 500,00 then, next month when the unemployment is reported as 400,000 new applicants Obama would be hailed as an economic genius!
This is actually happening a little quicker than I thought. How do you like your recessions, one dip or two?
Read more here.