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Latest Commentaries Subscription required Subscription

The next regular Commentary, scheduled for Tuesday August 16th, will cover July Industrial Production, Housing Starts, the Consumer Price Index (PPI) and related real Retail Sales and Earnings.  Given the amount of new detail being released, the August 16th missive minimally will be late-day and easily could run overnight to the 17th.  That latter case would be advised here.  Please the schedule for details.

No. 825: July Nominal Retail Sales, Producer Price Index, Consumer Conditions Subscription required August 12th, 2016
• Nominal Retail Sales Disappointed Expectations, Dropping by 0.04% (-0.04%) in July • July PPI Services Margins Declined by 0.27% (-0.27%), Goods Prices Fell by 0.37% (-0.37%), Construction Costs Plunged by 0.61% (-0.61%), Total Final Demand PPI Was Down by 0.36% (-0.36%) • Yet, Across-the-Board Deflation Generally Is Not the Common Experience • In What Will Become an Increasingly Regular Pattern, Initial Market Response to the Intensifying Economic Downturn Will Be a Weaker Dollar and Higher Gold, Silver and Oil Prices  More ...
No. 824: July Labor Conditions and M3, June Trade Deficit and Construction Spending Subscription required August 5th, 2016
• Just a Week into Headline 1.2% Second-Quarter GDP Growth, New Trade and Construction Spending Details Promise a Downside Revision • Trade Deficit Widened and Deepened in Revision, Worst Since 2007 • With Quarterly and Annual Growth Collapsing Anew, Real Construction Spending Growth Was Weakest Since 2011 Series Trough • Ten Years after its June 2006 Pre-Recession Peak, Real Construction Spending Remained Down 26% (-26%) from Recovering that Benchmark Level • Month-to-Month Unemployment Data Remained Meaningless and Nonsensical, Heavily Skewed by Inconsistent and Not-Comparable Seasonal Adjustments • Though Heavily Bloated by Seasonal-Factor Distortions and Add-Factors, Annual Payroll Growth Effectively Held at a 29-Month Low • July 2016 Unemployment: U.3 Held at 4.9%, U.6 Notched Higher to 9.7% and the ShadowStats-Alternate Rate Rose to 23.0% • Annual M3 Growth Eased to 4.1% in July 2016, from 4.5% in June, While the Monetary Base Firmed Slightly  More ...
No. 823: Second-Quarter 2016 GDP and Annual Revisions Subscription required July 31st, 2016
• Broad, Deepening Economic Downtrend Continued • Revised Annual Change in GDP Slowed Sharply, Consistent with Entering a Recession • Headline Real Quarterly GDP Revisions Took Fourth-Quarter 2015 and First-Quarter 2016 Growth Rates Lower, Below 1.0%, but Not Negative, with First-Quarter 2016 GNP Minimally Below Zero, Again • Well Below Consensus, the Advance Second-Quarter 2016 Real GDP Annualized Growth of 1.22% Faces Likely Downside Revisions • Nonetheless, Aggregate GDP Revisions Were Minimal and Heavily Gimmicked, Including Cycle-Dampening Three-Year Moving Averages • Carefully Structured Statistical Shenanigans Were Designed to Smooth the Business Cycle, Not to Reveal It • Velocity of Money Slowed Sharply in Second-Quarter 2016  More ...
No. 822: Durable Goods Orders, Home Sales, Freight Index, Household Income Subscription required July 27th, 2016
• Broad Economic Downtrend Continued, Despite a Likely Positive, First Guesstimate of Second-Quarter GDP • Real Durable Goods Orders Tumbled in Second-Quarter 2016 Both Before (-0.8%) and After (-4.1%) Consideration for Commercial Aircraft • Year-to-Year New Orders Fell Sharply in June 2016, Both Before and After Consideration of Inflation and Commercial Aircraft • Aggregate Real Durable Goods Orders Continued in Smoothed, Down-Trending, Low-Level Stagnation and Non-Recovery • Absurd Surges in New-Home Sales Activity Were Not Significant, with the Series in Continued Low-Level Stagnation and Non-Recovery, Still Shy of its Pre-Recession Peak by 57.4% (-57.4%) • Despite Highest Existing-Home Sales Level Since 2007, Activity Remained Shy of its Pre-Recession Peak by 23.4% (-23.4%), Continuing in a Smoothed Pattern of Non-Recovering Stagnation • Freight Index Showed Deepening New Recession, No Recovery • After Tumbling in April and May, Real Median Household Income Ticked Insignificantly Higher in June  More ...
No. 821: June Housing Starts, Preview of GDP Revisions Subscription required July 19th, 2016
• Housing Starts Continued to Hold in Smoothed, Low-Level Stagnation, Never Having Recovered Pre-Recession Highs • Second-Quarter Starts Growth Slowed Sharply Amidst Downside Revisions • Downside Benchmark Revisions to Key Series Underlying the GDP Indicate Pending Downside Benchmark Revisions to the GDP • First- and Fourth-Quarter 2015, and First-Quarter 2016 GDP Are Most Vulnerable to Negative Revisions  More ...
No. 820 : June Production, Retail Sales, Consumer and Producer Inflation Subscription required July 16th, 2016
• New Recession Remains Very Much in Play; Second-Quarter GDP Prospects Have Dimmed, with Auto Sales and Production Spiked by Prior-Month Downside Revisions • Never Seen Outside of Formal Recessions, Second-Quarter Production Showed Third Consecutive Set of Annual and Quarterly Contractions • Down in June by 6.2% (-6.2%) from Its Pre-Recession High, Second-Quarter Manufacturing Contracted • Second-Quarter Real Earnings Contracted • Although Positive in the Second Quarter, Real Retail Sales Continued Its Intense Recession Signal • June 2016 Annual Inflation Changed Minimally, with CPI-U at 1.0%, CPI-W Easing to 0.6% and ShadowStats at 8.7% • Monthly PPI Goods Inflation Rose by 0.84% and Services Margins Rose by 0.45% in June 2016, with Total Final-Demand PPI up by 0.36% for the Month, 0.27% for the Year  More ...
No. 819: June Employment and Unemployment, Money Supply M3 Subscription required July 8th, 2016
• Headline Month-to-Month Payroll and Unemployment Data Are Rubbish, Heavily Skewed by Inconsistent and Not-Comparable Seasonal Adjustments • Private Surveying Shows Plunging Employment Circumstances Last Seen During the 2009 Economic Collapse • June 2016 Unemployment Rates: U.3 Rose to 4.9%, but U.6 Notched Lower to 9.6% and the ShadowStats-Alternate Rate Eased to 22.9% • The Fed Will Not Buy These Numbers, Legitimately • Annual M3 Growth Jumped to 4.5% in June 2016, from 4.3% in May; While the Monetary Base Shrank a Bit  More ...
No.818: May Trade Deficit, Construction Spending, Fed and Dollar Troubles Subscription required July 6th, 2016
• QE4, Systemic and Dollar Troubles Appear on the Horizon • Trade Deficit Widened Anew, Damaging the Outlook for Second-Quarter GDP • Construction Spending Benchmarking Was to the Upside, but Headline Growth Numbers Were Broadly Negative, with Real Annual Growth Sinking to a 53-Month Low • Current Construction Spending Patterns Last Were Seen as Construction Activity Fell into Depression  More ...
No. 817: GDP Revision, Consumer Confidence, Evolving Global Circumstances Subscription required June 28th, 2016
• Brexit Impact Should Stabilize, with Implications for a Long-Overdue Reorganization and Overhaul of the EU and Euro • U.S. Long-Term Solvency and Dollar Issues Remain Greatest Threat To Global-Economic and Financial-Market Stability • In Final Reporting Before the July 29th GDP Benchmarking, U.S. Economy Was Stagnant in First-Quarter 2016, Reflecting No Statistically-Significant Change • Real GDP Revision from 0.84% to 1.07% Reflected Weaker Inflation; Real Growth Was Upped by 0.23% as Inflation Revised Lower by 0.22% (-0.22%) • Broader Gross National Product (GNP) Growth Revised to a 0.21% Gain, Having Declined Initially by 0.21% (-0.21%) • At the Expenditure-Category Level, GDP Revisions Could Be Described as Bizarre and Inconsistent • Shifting Political Perceptions May Have Boosted Consumer Confidence  More ...
No. 816: Durable Goods Orders, Home Sales, Freight Index, Household Income, Brexit Subscription required June 24th, 2016
• In the Context of Almost-Certain Heavy Central-Bank Interventions, Headline Market Volatility Largely Retrenched from Recent Hype that Brexit Would Lose • Yen and Gold Were Strongest Versus the Dollar Since 2014 • Real Median Household Income Tumbled Anew in May • Ex-Commercial Aircraft, Real Durable Goods Orders Are in a Trend for Second-Quarter Annualized Contraction of 1.8% (-1.8%) • Aggregate Real Durable Goods Orders Continued in Smoothed, Low-Level, Stagnant Non-Recovery • In the Context of Downside Corrections to Prior Months, May New-Home Sales Fell Sharply • Continuing in Low-Level Stagnation, Non-Recovering New-Home Sales Remained Shy of Pre-Recession Peak by 60.3% (-60.3%) • Despite Highest Existing-Home Sales Level Since 2007, Activity Remained Shy of Pre-Recession Peak by 23.9% (-23.9%), Continuing in a Smoothed Pattern of Stagnation • Freight Index Showed Continuing Non-Recovery and Deepening New Recession  More ...
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John Williams'
"Shadow Government Statistics"

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Some Biographical & Additional Background Information

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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