If you’ve watched Chapter 16 of the Crash Course (Fuzzy Numbers), you know that I am especially dismissive of the way in which the BEA calculates the US GDP figures.
All manner of statistical tricks, many of which would land private business accountants in jail, are used to create an overly optimistic view of the GDP.
Recently the US GDP was reported as being +2.2% for the 3Q09, and many are calling for 4Q09 to come in at around +3%.
This means that when we add these to the -6.4% 1Q09 and -0.7% 2Q09 results and average everything together, the full year will have been down less than half a percent.
Imagine that….with auto and home sales off by more than 10%, with port shipments down by some 20%, with gasoline and electricity use back to levels last seen in a prior decade, with unemployment over 10% (and the underemployed number at 17%), and with the largest-ever collapse in household borrowing on record….the BEA manages to come out with a full-year GDP report that will show an exceptionally modest decline of roughly one-half of one percent.
While I am sympathetic to idea that the government has been dumping tons of money into the economy, I still find it hard to reconcile most of the base data regarding the economy with the BEA reports.
If it turns out that we’ve been fudging the numbers again for reasons of political or social control, that would not surprise me in the least. In fact, given all the times in the past when I have caught the statisticians fudging things, my ingoing position is to always discount the official numbers as being too high.
Another way we might gauge whether the US was padding its books in 2009 would be to see how other countries with slightly more believable reporting systems did during that year.
German Economy Suffers Worst Post-War Contraction
The German economy contracted by a record 5 percent last year due to a slump in its key export sector, but the government is poised to raise slightly its forecast for modest growth in 2010.
The 2009 slump, deepened by a dip back down to around zero growth in the fourth quarter, was more than five times more severe than the previous post-war nadir in Europe’s largest economy.
by kenc