Today in Green Shoots
Leading headlines this morning are two economic datapoints that count as positive in the current climate. Thursday is the day for weekly jobless claims, and
Jul 31, 202070.2K Shares1.4M Views
Leading headlines this morning are two economic datapoints that count as positive in the current climate. Thursday is the day for weekly jobless claims, and while initial and continuing claims remainat extremely high levels (the latter hit yet another record), the steady downtick in initial weekly claims over the past months is good news. Typically, sustained declines in such claims are one of the first indicators that contraction has come to and end, but with levels this high, there is a risk that the pressure from elevated unemployment could generate a new cycle of decline.
The other piece of goodish news comes from the Commerce Department, which announced a jump in April durable goods orders of 1.9 percent — the largest increase since December of 2007. But let me quote the Bloomberg write-upof the release:
“„The 1.9 percent increase reported by the Commerce Department today in Washington was the largest since December 2007, and followed a revised 2.1 percent drop in March that was more than twice as large as previously estimated.
Catch that? April’s increase looks so big because March’s decline was much worse than originally estimated. Taking into account all the revisions, new orders in April are actually a little lower than the new orders recorded in February, on a seasonally adjusted basis. So while the splashy release is good for confidence, the true economic picture is more complex than is being intimated.
There is a line of thought that’s been circulating recently among the conspiracy-minded, that the government has been systematically reporting better than actual advance data results, only to revise the data down in subsequent releases. I’m very skeptical of this hypothesis; as a former government stats guy, I don’t even know how this would happen. Most stats gathering is done in a very bottom up fashion. Still, the size of recent revisions indicates that one can’t get an accurate picture of the changing economy without digging beneath the headlines.
Paula M. Graham
Reviewer
Latest Articles
Popular Articles