Statistics, statistics

The blog has worried in the past about the way that official statistics seem to be increasingly manipulated to provide a rosy view of the economy. Barrons, the leading US investment magazine, provides another example this week, in connection with the report that US GDP grew at 3.3% in Q2.

Barrons notes that this is supposed to be a ‘real’ figure, ie after adjusting for inflation. This leads them to question why the inflation rate used by the statisticians was just 1.33%? And they comment, ‘maybe it did — but not in the good old U.S. of A’, adding that this would have been the lowest inflation rate in 5 years. It is also a major discrepancy with official figures for consumer price inflation, which was reported at 8.8% for Q2.

Barrons suggests that if a realistic inflation estimate had been used, the US economy would instead have been shown to have contracted by 2.9%. Quite a difference!

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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