Our financial system is crumbling this week.

[sighyoung]

I think information is released early because many people--inside and outside of the economy--rely on data to see general trends, and they need something--anything--especially when they have to make decisions months, or even years, in advance. (How big will the Christmas holiday season be in retailing? Should we scale up our workforce? Should we push up production of our new SUV line, or delay?) Many people know that this data is crude, but it's what they can get in the short run, and they are looking at multiple data points to try to create a more complicated estimate of trends or see effects from past events--an oil price spike, changes in tax policy, central bank decisions in Europe and China, a break in the supply chain such as the Suez Canal accident a few years back. So initially, it's not about precision and nuance, but getting a crude overall picture.

So, as ghostrunner says, there's risk in this, but in some cases, waiting for better data is like the captain of the Titanic wanting a clearer sense of the iceberg from the bottom of the ocean.

My next-door neighbor was an economist before switching to computer engineering. (He's retired now.) He mentioned that you learn from through experience what to look for, both because of economic theory (which is crude in its own way), and also from experience to look for leading indicators--borrower default rates, new car purchases, directions in consumer spending. But it's always imperfect.

I sometimes wonder if some of the problems are due to reportage--just as early drug trials and mice are blown out of proportion because reporters don't always know just what is being reported or how to put it in context.

[Arthur Dent]

I sometimes wonder if some of the problems are due to reportage--just as early drug trials and mice are blown out of proportion because reporters don't always know just what is being reported or how to put it in context.

That's definitely true.

I used to regularly read Dean Baker's Beat the Press column commenting on economic reporting, which is often terrible in extremely easy to fix ways. Amongst the most common sins is just throwing around huge numbers with no context, so an ordinary reader has no chance of getting any real information from the number. So, in writing about the federal budget or taxes, it's typical to say it costs $300 billion, or whatever, without even saying over what time period. Sometimes it's one year, sometimes it's 10 years, sometimes it's over the life of the project. Makes a huge difference, but it seems like the writers often don't have any idea themselves or possibly just don't care. In any case, those numbers are meaningless if you are not steeped in the subject. You could easily say, it's x% of revenue or budget or whatever, but that's generally skipped for no reason.

The job numbers seem to be reported by political journalists who like who's in/who's out drama and neither know nor care about the underlying subject. The rise of the wonk-style journalist has changed this somewhat, but I don't know how far that carries in the general population.

[cardinalkarp]

I get what you guys are saying, there just seems to be a recent pattern of over estimating the job market (which is reported upon) for a temporary boost in the economy, and then a subsequent reduction in the number months down the road when most a no longer paying attention (and less reporting of that number).

It does make sense to get something out there to help gauge the market, but honestly, what good is that number if it’s consistently wrong.

I’m no economist obviously, but again, it just seems like market manipulation to me.

[sighyoung]

I get what you guys are saying, there just seems to be a recent pattern of over estimating the job market (which is reported upon) for a temporary boost in the economy, and then a subsequent reduction in the number months down the road when most a no longer paying attention (and less reporting of that number).

It does make sense to get something out there to help gauge the market, but honestly, what good is that number if it’s consistently wrong.

I’m no economist obviously, but again, it just seems like market manipulation to me.

I can see that, and I can understand distrust. To me, it may be a difference between data collection and data reportage, too--what the data is actually good for, and how an administration wants certain numbers understood in the press. The latter occurs ALL the time, and I can see why people would be skeptical.

When I see economists discussing the data on social media--I don't mean those who are promoting themselves, but those who are in genuine conversation with other economists and other posters--they don't seem to think the data is fake or massaged, but will say "this number is way higher (or lower) than what I would expect. Do you think this is close to the true number, or do you think this will be revised down in the next quarter? What would explain this?" and there will be a thoughtful conversation about what is there and why. In the end, there may be a difference of opinion about what is likely showing up or happening, or if upcoming data of a different kind will change everything. In the meantime, the administration will absolutely take a victory lap, and will drop the subject if the numbers are corrected downwards. That, of course, is meant to influence markets and public opinion.

[sighyoung]

I sometimes wonder if some of the problems are due to reportage--just as early drug trials and mice are blown out of proportion because reporters don't always know just what is being reported or how to put it in context.

That's definitely true.

I used to regularly read Dean Baker's Beat the Press column commenting on economic reporting, which is often terrible in extremely easy to fix ways. Amongst the most common sins is just throwing around huge numbers with no context, so an ordinary reader has no chance of getting any real information from the number. So, in writing about the federal budget or taxes, it's typical to say it costs $300 billion, or whatever, without even saying over what time period. Sometimes it's one year, sometimes it's 10 years, sometimes it's over the life of the project. Makes a huge difference, but it seems like the writers often don't have any idea themselves or possibly just don't care. In any case, those numbers are meaningless if you are not steeped in the subject. You could easily say, it's x% of revenue or budget or whatever, but that's generally skipped for no reason.

The job numbers seem to be reported by political journalists who like who's in/who's out drama and neither know nor care about the underlying subject. The rise of the wonk-style journalist has changed this somewhat, but I don't know how far that carries in the general population.

++

[Leroy]

Just have Chat GPT do it. Can't fire AI.

[mikechamp]

"It's a jumbled mess" isn't a good way to describe an economy. I'm paraphrasing, but still...

The US economy is a puzzle but the pieces aren't fitting together

Ask almost any economist and they will tell you: US President Donald Trump has been running risks with the world's largest economy. They say his tariffs and crackdown on immigrants risk a return of 1970s-esque "stagflation", when a sudden oil shock prompted stagnant growth and spiralling prices, except this time the crisis would be self-inflicted.

The White House has just as steadfastly dismissed those concerns, attacking the experts - and, in the case of the US Bureau of Labor Statistics commissioner, firing her.

Questions about how it will all play out have left the US central bank in a state of paralysis, as it waits for data to clarify what's happening before making a move on interest rates. But after a busy few weeks of company updates, data on jobs and inflation, we still don't really know.

https://www.bbc.com/news/articles/cwypgx90243o

[IMADreamer]

It's crazy how fast the country has unraveled. It really feels like there will just be a day when it all snaps and the markets collapse and there is run on the grocery stores, banks, etc and then all hell breaks loose.

[cardinalkarp]

It's crazy how fast the country has unraveled. It really feels like there will just be a day when it all snaps and the markets collapse and there is run on the grocery stores, banks, etc and then all hell breaks loose.

It’s never been an IF, but more of a WHEN. Things have been unraveling for the past decade or so, and it’s just a house of cards waiting to collapse.

Preparation for something like this has always seemed like a “kooky” thing to do, but having a plan IF something really bad happens is never a bad idea. Have things on hand that you’re going to use (or eat), even if the facade remains in tact for awhile longer. The peace of mind of being fairly self sufficient, having enough food on hand to last you awhile, along with being able to protect yourself is money in the bank.

[IMADreamer]

It's crazy how fast the country has unraveled. It really feels like there will just be a day when it all snaps and the markets collapse and there is run on the grocery stores, banks, etc and then all hell breaks loose.

It’s never been an IF, but more of a WHEN. Things have been unraveling for the past decade or so, and it’s just a house of cards waiting to collapse.

Preparation for something like this has always seemed like a “kooky” thing to do, but having a plan IF something really bad happens is never a bad idea. Have things on hand that you’re going to use (or eat), even if the facade remains in tact for awhile longer. The peace of mind of being fairly self sufficient, having enough food on hand to last you awhile, along with being able to protect yourself is money in the bank.

We feel the same way which is why we have a pretty large garden, we are actually building a greenhouse this fall, and we can a lot of our own food. We also can hunt for food if we have to. Admittedly I'm not much of a hunter but my wife enjoys it. It's nice because it provides us with a lot of meat for the freezer.