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ShadowStats Newsletter
"John Williams’ Shadow Government Statistics" is an electronic newsletter service that exposes and analyzes flaws in current U.S. government economic data and reporting, as well as in certain private-sector numbers, and provides an assessment of underlying economic and financial conditions, net of financial-market and political hype.
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Latest Commentaries
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PLEASE NOTE: The next regular Commentary, Thursday, May 4th, will cover the March 2017 Trade Deficit and Construction Spending, followed by another missive on Friday, May 5th, covering April Employment and Unemployment. See Schedule for details.
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No. 883: First-Quarter 2017 GDP, Consumer Liquidity

April 29th, 2017
• Weaker-than-Expected First-Quarter GDP Real Growth of 0.69% Was Suggestive of Stalling Economic Activity
• Headline Growth Likely Faces Downside Revisions in the Next Two Months
• Final Sales (GDP Net of Inventory Change) Rose to 1.62% from 1.07%
• Better-Quality Series Show Continuing, Protracted Economic Collapse, with No Recovery of Pre-Recession Highs and No Economic Expansion
• First-Quarter 2017 Velocity of Money Rose Minimally for M3, Declined for M1 and M2
• Renewed Stresses on Consumer Liquidity More ...
No. 882: March Durable Goods Orders and Home Sales, Retail Sales Annual Revisions

April 27th, 2017
• Benchmarked Retail Sales Revised Higher with 2015 Survey Details, but Subsequent Annual Growth Revised Sharply Lower, to Date, Generating a New, Traditional Signal for Recession
• Net of Inflation and Irregularly-Surging Commercial Aircraft Orders, the Headline Gain of 0.7% in March 2017 Durable Goods Orders Was 0.1%; Real Activity Continued in Low-Level, Non-Recovered Stagnation
• Monthly New- and Existing-Home Sales Rose in March, In the Continuing Context of Low-Level, Non-Recovered Stagnation
• Despite Big Boost from Headline Drop in March CPI, March Real Median Household Income Was Statistically Unchanged, Still Holding Below January 2000 and Signaling Consumer Liquidity Stresses More ...
No. 881 March Industrial Production, Housing Starts, Freight Index, Economic Review

April 19th, 2017
• Broad Outlook Continues for Economic Stagnation and an Intensifying Downturn
• Unusual Weather Patterns Boosted March Utility Usage by a Record 8.6%; Otherwise, the 0.5% Production Gain Was a Contraction of 0.4% (-0.4%)
• Dominant Manufacturing Sector Dropped by 0.4% (-0.4%) on Top of Downside Revisions to January and February (Automobile Manufacturing Fell)
• Mining Sector Rose by 0.1%, Reflecting Soaring Gold Mining and Oil Production, Largely Offset by Plunging Coal Mining
• Still No Economic Expansion: Activity Held Below Pre-Recession Peaks, with Production Down by 1.2% (-1.2%), Manufacturing Down by 6.4% (-6.4%) and Housing Starts Down by 46.5% (-46.5%)
• Residential Construction Continued in Low-Level, Non-Recovering Stagnation
• Freight Index Continued in Low-Level, Non-Recovering Stagnation More ...
No. 880 : March CPI, PPI, Retail Sales, Real Earnings, Consumer Update
April 15th, 2017
• Substantially Adverse Economic Circumstances Have Begun to Unfold, Threatening FOMC Hopes for Normalizing Monetary Policy
• Amidst Mounting Income and Credit Stresses on Consumers, Headline Retail Sales Suffered Major, Near-Term Downside Revisions; Recent Auto Sales Were Not As Strong as Advertised
• First-Quarter Real Average Weekly Earnings Declined Year-to-Year, Along with Back-to-Back Quarterly Contractions, Circumstances Not Seen Since the Stalled GDP of Second-Half 2012
• Real Growth in Consumer Credit Outstanding Has Faltered in a Manner Also Not Seen Since the Stalled GDP of Second-Half 2012
• Headline CPI-U Inflation Fell by 0.29% (-0.29%) in March, Pushing Annual CPI-U Inflation Lower to 2.38% (Was 2.74%), with CPI-W at 2.35% (Was 2.82%) and ShadowStats at 10.1% (was 10.5%)
• March Final-Demand PPI Annual Inflation Hit a 60-Month High of 2.28% More ...
No. 879: March Employment and Unemployment, Help-Wanted Advertising, Money Supply M3

April 7th, 2017
• FOMC-Rattling 'Substantially Adverse Economic Circumstances' Loom
• March 2017 Real-World Employment Prospects Continued to Plunge at an Annual Pace of Decline Not Seen Since the Depths of the Economic Collapse
• Soft Payroll Jobs Gain of 98,000 in March Was Not Statistically Significant
• Declining Monthly Unemployment Rates Simply Were Not Comparable
• That Said, March Unemployment: U.3 Declined to 4.5% from 4.7%, U.6 Fell to 8.9% from 9.2% and ShadowStats-Alternate Fell to 22.5% from 22.7%
• Those Were the Lowest, Headline Unemployment Rates for U.3 since May 2007, for U.6 since December 2008 and for ShadowStats since April 2012
• Nominal Money Supply M3 Annual Growth Sank to a 57-Month Low in March, Real Growth Declined to a Level Not Seen Since Depths of the Economic Collapse More ...
No. 878: February Trade Deficit, Construction Spending, Updated Consumer Liquidity

April 4th, 2017
• Sharp Narrowing in February 2017 Trade Deficit Reflected Plunging Imports of Consumer Goods, Such as Autos and Cell Phones
• Declining Consumer Demand and/or a One-Time Reporting Aberration?
• First-Quarter 2017 Real Merchandise-Trade Is on Track for Worst Deficit Since Third-Quarter 2007
• Despite a Nominal 0.8% Monthly Gain in February Construction Spending, Inflation-Adjusted Activity Remained in Stagnant Non-Recovery, Headed for First-Quarter 2017 Quarterly and Annual Contractions
• Consumers Face Continuing Income and Credit Stresses, Amidst Mixed Optimism More ...
No. 877: Industrial Production Benchmark Revision

April 2nd, 2017
• Industrial Production Just Took a Hit with Its Benchmark Revisions, Given Higher-Quality, Weaker Historical Data from 2015
• Double-Dip Recession in Production Now Steeper than Previously Indicated
• Two or More Consecutive Quarters of Annual Decline in Production Are Unprecedented Outside of Formally-Recognized Recessions; There Were Five, Now There Are Seven Consecutive Quarters in Place
• Gold and Silver Mining Activity Revised Sharply Higher
• Negative Indications for Pending Benchmark Revisions to Retail Sales, Durable Goods Orders and the GDP
• Broad Outlook Continues for Non-Recovering Economic Activity
• Issues Foreshadow FOMC Problems, a Weaker Dollar and Stronger Gold More ...
No. 876: GDP Revision and the Business Cycle, February Household Income

March 30th, 2017
• Details of Economic Depression versus Recession, Recovery and Expansion
• No Other Major Economic Series Comes Within Three Years of the Headline Brevity of the GDP Collapse into 2009 and Recovery into 2011, or Comes Close to Matching the Subsequent 12.2% GDP Expansion
• Better-Quality Series Show Continued, Protracted Economic Collapse, with No Recovery of Pre-Recession Highs and No Economic Expansion
• Annualized Fourth-Quarter Real Growth in Gross Domestic Product Revised to 2.08% from 1.86%
• Fourth-Quarter Final Sales Growth (GDP net of Inventory Change) Fell to 1.07% versus 3.02% in Third-Quarter 2016
• Initial Reporting of Fourth-Quarter Gross Domestic Income at 1.00%, Gross National Product at 2.88%
• 2016 Annual GDP Growth Still Was Weakest Since the Economic Collapse, Both Before and After Inflation Adjustment
• Broad Outlook Continues for Non-Recovering Activity and Economic Disruption
• February Real Median Household Income Increased, Still Holding Below its Pre-Recession High and Signaling Consumer Liquidity Stresses More ...
No. 875: Durable Goods, New- and Existing-Home Sales, Freight Index, Business Cycle

March 24th, 2017
• Details of Economic Depression versus Recession, Recovery and Expansion
• Amidst Signals of Renewed Downturn, the Broad Business Outlook Continues for Non-Recovering Activity and Economic Disruption
• Net of Inflation and Irregularly-Surging Commercial Aircraft Orders, the Headline Gain of 1.7% in February Durable Goods Orders Was a Monthly Contraction of 0.3% (-0.3%)
• Freight Index Annual Growth Moved Higher for Third Straight Month, Still Holding in a Pattern of Low-Level Stagnation
• Suggestive of Continuing Financial-System Liquidity Stresses, Rising Portions of Existing-Home Sales Were in Foreclosure and/or Were All Cash Sales
• Mixed Monthly Activity in February New- and Existing-Home Sales Continued in the Context of Low-Level Non-Recovery More ...
No. 874: February Industrial Production, Updated Economic Review

March 17th, 2017
• Industrial Production May Be Bottoming, Yet, There Are New Signals of Intensifying Economic Risk
• Production Was Flat in February, Minimally Positive Year-to-Year, with Gains in Manufacturing and Mining Offset by Weather-Distorted Utilities
• No Economic Expansion: Activity Held Below Pre-2007 Recession Peaks, with Production Down by 0.94% (-0.94%), Manufacturing Down by 4.97% (-4.97%)
• Major Downside Revisions to Production Activity of Recent Years Likely Loom with the March 31st Annual Benchmarking Going Back to 1972
• General Outlook Remains in Place for Continuing Near-Term Economic Stagnation and Renewed Downturn More ...
Archives
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Have you ever wondered why the CPI, GDP and employment numbers run counter to your personal and business experiences? The problem lies in biased and often-manipulated government reporting.
Primers on Government Economic Reports What you've suspected but were afraid to ask. The story behind unemployment, the Federal Deficit, CPI, GDP.
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Services include customized forecasts and analyses of the general economy, presentations and consultations in-house for clients. Contact us to discuss your needs.
John Williams' "Shadow Government Statistics"johnwilliams@shadowstats.comTel: (415) 512-7701
American Business Analytics & Research LLC
The Hearst Building 5 Third Street, Suite 1301 San Francisco, CA 94103
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Some Biographical & Additional Background Information
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Walter J. "John" Williams was born in 1949. He received an A.B. in Economics, cum laude, from Dartmouth College in 1971, and was awarded a M.B.A. from Dartmouth's Amos Tuck School of Business Administration in 1972, where he was named an Edward Tuck Scholar. During his career as a consulting economist, John has worked with individuals as well as Fortune 500 companies.
Although I am known formally as Walter J. Williams, my friends call me “John.” For 30 years, I have been a private consulting economist and, out of necessity, had to become a specialist in government economic reporting.
One of my early clients was a large manufacturer of commercial airplanes, who had developed an econometric model for predicting revenue passenger miles. The level of revenue passenger miles was their primary sales forecasting tool, and the model was heavily dependent on the GNP (now GDP) as reported by the Department of Commerce. Suddenly, their model stopped working, and they asked me if I could fix it. I realized the GNP numbers were faulty, corrected them for my client (official reporting was similarly revised a couple of years later) and the model worked again, at least for a while, until GNP methodological changes eventually made the underlying data worthless.
That began a lengthy process of exploring the history and nature of economic reporting and in interviewing key people involved in the process from the early days of government reporting through the present. For a number of years I conducted surveys among business economists as to the quality of government statistics (the vast majority thought it was pretty bad), and my results led to front page stories in 1989 in the New York Times and Investors Daily (now Investors Business Daily), considerable coverage in the broadcast media and a joint meeting with representatives of all the government's statistical agencies.
Nonetheless, the quality of government reporting has deteriorated sharply in the last couple of decades. Reporting problems have included methodological changes to economic reporting that have pushed headline economic and inflation results out of the realm of real-world or common experience.
Over the decades, well in excess of 1,000 presentations have been given on the economic outlook, or on approaches to analyzing economic data, to clients—large and small—including talks with members of the business, banking, government, press, academic, brokerage and investment communities. I also have provided testimony before Congress (details here).
An old friend—the late-Doug Gillespie—asked me some years back to write a series of articles on the quality of government statistics. The response to those writings (the Primer Series available at the top-center of this page) was so strong that we started ShadowStats.com (Shadow Government Statistics) in 2004. The newsletter is published as part of my economic consulting services. — John Williams
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