{"id":31087,"date":"2018-02-16T13:43:04","date_gmt":"2018-02-16T18:43:04","guid":{"rendered":"http:\/\/olduvai.ca\/?p=31087"},"modified":"2018-02-16T13:43:04","modified_gmt":"2018-02-16T18:43:04","slug":"lies-damned-lies-and-statisticsand-the-cpi","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=31087","title":{"rendered":"Lies, Damned Lies, And Statistics\u2026And The\u00a0CPI"},"content":{"rendered":"

Lies, Damned Lies, And Statistics\u2026And The\u00a0CPI<\/a><\/h3>\n
\n

The first three of those words are attributed to the British Prime Minister,\u00a0 Benjamin Disraeli<\/a>, and also sometimes associated with Mark Twain.<\/p>\n

You know our skepticism of most government data<\/a>, especially the BLS calculation of inflation in consumer goods and services.\u00a0 The data are so massaged by seasonal and hedonic adjustments, and even full-blown methodological revamps when the numbers do not fit the objectives of the government, they just don\u2019t reflect reality.<\/p>\n

Go back to 1982 when the BLS came up with the concept of \u201cowner\u2019s equivalent rent (OER),<\/a>\u201d a large component of how the price of shelter is calculated in the CPI.\u00a0 This was in response to the government believing rising housing prices were distorting the true cost of housing.\u00a0 Houses were then\u00a0recategorized as capital goods. \u00a0 The data for OER is not hard,\u00a0 not a real world\u00a0 data point that can be measured,\u00a0 such as egg prices.<\/p>\n

A friend pointed out the following in today\u2019s Wall Street Journal today,<\/p>\n

A monthly measure of what households pay for everything except gasoline and food rose a seasonally adjusted 0.349% in January\u2014the strongest one-month increase since March 2005\u2014driven by broad-based increases in costs like rent, clothing and medical services.\u00a0 \u2013 WSJ, February 15<\/a><\/strong><\/em><\/p>\n

We wonder out loud about the 0.349 percent print.\u00a0 Round it down, Charlie Brown!<\/p>\n

Just another 0.001 percent and the BLS would have posted a core CPI monthly change of 0.4 instead of the 0.3 percent. The market response?<\/p>\n

The headline number print of 0.5 percent was also very close to its rounding point. \u00a0 Going out three more decimals<\/a>, the number was .5448 percent.\u00a0 Another 0.0012 percent, headline CPI prints at 0.6 percent.<\/p>\n

Could they have?<\/p>\n

Bureaucrats day trading (the data not securities) the monthly economic data?\u00a0 The word comes down from on high not to kill Goldilocks with RoundUp<\/a>?<\/p>\n

You decide.<\/p>\n

File this one under all things rigged<\/a> and don\u2019t cry for me, Argentina<\/a>!<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Lies, Damned Lies, And Statistics\u2026And The\u00a0CPI The first three of those words are attributed to the British Prime Minister,\u00a0 Benjamin Disraeli, and also sometimes associated with Mark Twain. You know our skepticism of most government data, especially the BLS calculation of inflation in consumer goods and services.\u00a0 The data are so massaged by seasonal and […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1055,172,18615,15450,2864,2084],"class_list":["post-31087","post","type-post","status-publish","format-standard","hentry","category-economics","tag-consumer-price-index","tag-cpi","tag-damned-lies","tag-global-macro-monitor","tag-lies","tag-statistics"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31087","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=31087"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31087\/revisions"}],"predecessor-version":[{"id":31088,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31087\/revisions\/31088"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=31087"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=31087"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=31087"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}