What are we supposed to think when the government releases statistics that fly in the face of every other non-government indicator we have? Should we conclude that the "official story" is merely propaganda? That the government methodology is flawed? Assuming no one is actually changing the numbers before the public sees them, we might surmise that the "flaws" in the analysis are driven by a hidden, unconscious bias in the methodology which puts a positive slant on the results.
These are deep mysteries, but the "official story" stands because it is the sanctioned view of our economic reality. People like me or Mish, who question those numbers, can be safely dismissed as wacko bloggers. The point of contention is September retail sales from the Census Bureau—
Purchases rose 0.6 percent following a 0.7 percent gain in August that was larger than previously estimated, according to Commerce Department data issued today in Washington...
Target Corp, the second-biggest discount retailer behind Wall-Mart Stores, Inc. said last week that it would lower prices on more than 1,000 toys to attract shoppers. Its larger rival responded this week with its own discounts, advertising savings on brands such as Barbie and Nerf toys...
The updated figures prompted economists at Morgan Stanley to raise their forecast for third-quarter economic growth to 2.3 percent from 1.8 percent before the report. The economy expanded at a 1.7 percent annual pace in the second quarter, slowing from 3.7 percent in the previous three months.
Source: Calculated Risk
Despite our economy being a bad joke, the retail sales numbers bolster the "official story" of sluggish growth in the economy. In fact, Morgan Stanley prognosticators decided to up their estimate of 3rd quarter GDP growth from 1.8% to 2.3% based on the sales numbers. Never mind that the advance estimate for 2nd quarter GDP started out at 2.4% but fell to 1.7% in the final estimate, a number which few people looked at when it was announced. And this "final" number may be revised downward again some months or years from now. Look at the "Orwellian Twist" part of my older post Updates To The Usual Horror Stories—
The world’s largest economy shrank 4.1 percent from the fourth quarter of 2007 to the second quarter of 2009, compared with the 3.7 percent drop previously on the books, the Commerce Department said today in Washington. Household spending fell 1.2 percent in 2009, twice as much as previously projected and the biggest decline since 1942.
The Commerce Department only told us how bad things were during the worse part of the recession a long time after the fact. And now we're being told that retail sales are looking good. Stay tuned.
Mish explains why he doesn't believe the government statistics, so read over there to get the details. I would add that past and present government numbers are also not in accord with the Consumer Metrics Institute numbers on durable goods sales.
Any statistical measurement of anything is a caricature of Reality. but government statistics consistently tell a story that says things are better than they are. Retail sales are rising, but Wal-mart and Target are practically giving shit away to get people to buy it. And if people are paying more for gasoline, retail sales go up. Yes, people bought more cars than they had the previous month, but who bought them? It's hard to believe that lower- and middle-income people are buying new cars if they can keep the old ones running.
The Awful Truth is that government statistics are just another form of Denial about the direction the Empire is moving in. As the Commerce Department reports the joyous retail sales news and Morgan Stanley economists raise advance GDP estimates, larger, dangerous forces are at work which undermine our future.