Weekly Updates
Weekly Updates
- In January, the number of jobs in the US fell by more than two and a half million. It was reported as a rise of just over half a million. The value of US retail sales slumped over 16%. It was reported as a rise of 3%.
- The difference between the economic reality and reported economic data is due to seasonal adjustment. Consumers refuse to behave in a steady, rational fashion—much to the irritation of economists. The exuberant excesses of December give way to dull remorse of “dry January,” creating seasonal fluctuations in behavior.
- Statisticians use past history to smooth this seasonal variations in economic data. While most adjustments exclude the “outlier” of the pandemic, it is harder to deal with the ongoing distortions as the world reopened after the pandemic. There was a lot of upheaval in consumption and employment behavior throughout 2021 and 2022, affecting seasonal adjustments in 2023.
- Over the course of a year, seasonal adjustments net to zero. That means that the large positive changes to data today will be compensated with equally large declines in data adjustments later this year. The statistical effect of the pandemic has a long reach.
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