Turd Flinging Monkey @[email protected]

>U.S. economic data is hitting headlines yet again—this time, due to serious concerns about its continued reliability.

>“Federal statistical agencies face increasing challenges to their ability to produce relevant, timely, credible, accurate, and objective statistics,” researchers of the American Statistical Association revealed.

>“Immediate action is needed to put the agencies … on a firmer footing so that federal statistics remain widely trusted and useful….”

>In its recent report, the ASA warned that federal statistical agencies are increasingly “handicapped in their ability” to answer the demands of an information-starved society. This downward trend has been several years in the making, but it’s now worrying enough “to raise the alarm with data users and taxpayers that the system is at risk,” according to report coauthor Steve Pierson.

>The report cited three critical weaknesses affecting statistical agencies, including overdependence on political agencies for financial support, scarcity of manpower and budget, and insufficient decision-making power free from political guidance and interference.

>So there’s a shortage of bar graphs and decimal points. Who cares? Researchers answer: Everyone. Unreliable data, especially when presented as reliable, puts the nation’s economic, social, and political future at risk.

>“Lousy data beget lousy decisions,” said Erica Groshen, senior economics advisor at Cornell University. “It is no exaggeration to say that Americans’ well-being and the vitality of the U.S. economy rely … on the quality of information provided by our federal statistical system.”

>[...] The Bureaus of Economic Analysis and Labor Statistics—both of which just released updated reports—aren’t the only ones in need of tune-ups, according to the ASA. All 13 of the federal statistical agencies, including those processing data on transportation, justice, energy, agriculture, health, science, and education, faced at least one of the three reliability weaknesses identified in the report.

>Nor is the ASA’s report the first major criticism of federal data. Last year, WSJ author James Mackintosh noted that significant revisions to jobs and GDP growth reports have resulted in at least three serious waves of malinvestment. Not only did the belated revisions cause significant deviations from original estimates, but in some cases, they even completely reversed the original picture, sending investors on a wild goose chase after losses—or growth—that didn’t exist.

>It’s not enough, according to Mackintosh, to simply point out that there might be flaws in the data, or that first passes aren’t always correct. Investors are always seeking certainty. And “certainty,” for many, looks more like a government jobs report that’s widely covered in the news than a cautionary tale from the non-governmental ASA organization, or a single news article by the WSJ.

>“Even wise investors are prone to buying into narratives about the current state of the economy that turn out to be deeply flawed,” Mackintosh wrote. “Ultimately narratives drive markets, and one has to be really sure the narrative is based on a mistake to take the opposite view.”

>According to the ASA, the real reliability crisis isn’t happening today but could be coming tomorrow if statistical agencies aren’t immediately held, funded, and staffed to higher standards.

>“While federal statistical agencies continue to reliably produce trustworthy data, the agencies remain susceptible to … political meddling and improper influence,” report authors wrote. “Resource deficiencies undermine the ability of many agencies to produce relevant and timely data and to innovate effectively.”

The US is far worse than the Soviet Union was in the depth of the late 80's, and this presupposes that there isn't more road to kick the can on for the US (of course there is).

zerohedge.com/commodities/us-few-short-years-data-reliability-crisis-study-warns