It isn’t only the federal government’s Bureau of Labor Statistics that is issuing surprisingly good news about the U.S. economy these days.
If former General Electric Co. Chief Executive Officer Jack Welch’s charges of a political fix to manipulate economic data ahead of the presidential election are true, there must be a vast econometric conspiracy embracing auto dealers, real estate agents, the Federal Reserve and corporate America’s 96-year-old Conference Board.
The economy is improving more than professional forecasters anticipated, particularly in data on employment and housing, according to the Bloomberg Economic Surprise Index, which compares 38 indicators with analysts’ predictions. The index, based on gauges compiled by private businesses and trade groups in addition to government, confirms U.S. growth is generating jobs in the face of a global slowdown and looming federal spending cuts and tax increases known as the fiscal cliff.
“The economy is improving, and the labor market is getting better,” said Robert Brusca, president of Fact & Opinion Economics and a former New York Fed economist. “These numbers are what they are, they’re not being slanted. On a scale of one to 10, the economy is at a fairly firm six and may be heading higher…”
An Oct. 5 report from the BLS showed the jobless rate fell in September to 7.8 percent, the lowest since Obama took office in January 2009, from 8.1 percent in August. The rate was forecast to rise to 8.2 percent, according to the median estimate in a Bloomberg survey of 88 economists…
The BLS data also showed that employers added 114,000 workers to payrolls last month after a revised 142,000 gain in August. The September figure was in line with economists’ estimates for an increase of 115,000…
The Bloomberg Economic Surprise Index, which compares indicators with analysts’ predictions, shows a growing number of those measures are exceeding expectations. The index climbed to minus 0.06 yesterday from this year’s low of minus 0.42 at the end of July.
The Citigroup Economic Surprise Index shows a more pronounced improvement. It jumped to 49.4 yesterday from this year’s low of minus 65.3 on July 19. A positive reading suggests the economic releases have on balance been better than the Bloomberg consensus.
Among the indicators that have topped analysts’ forecasts: consumer confidence, car sales and purchases of existing homes…
This report from Bloomberg rolls on through many more variables, multifaceted views of the American economy – and even a touch or two on the coming election. The song remains the same.
Politicians and corporate barons who fear continued oversight from our government, who want the same unfettered freedom to lie, cheat and steal that characterized the Bush-Cheney years – want with every fiber of their being to cast our economy into dire straits.
Another reason why I’d rather learn about economics from scholars than pundits.