Statistics, statistics

The blog has worried in the past about the way that official statistics seem to be increasingly manipulated to provide a rosy view of the economy. Barrons, the leading US investment magazine, provides another example this week, in connection with the report that US GDP grew at 3.3% in Q2.
Barrons notes that this is supposed to be a ‘real’ figure, ie after adjusting for inflation. This leads them to question why the inflation rate used by the statisticians was just 1.33%? And they comment, ‘maybe it did — but not in the good old U.S. of A’, adding that this would have been the lowest inflation rate in 5 years. It is also a major discrepancy with official figures for consumer price inflation, which was reported at 8.8% for Q2.
Barrons suggests that if a realistic inflation estimate had been used, the US economy would instead have been shown to have contracted by 2.9%. Quite a difference!