Tuesday, February 18, 2014

Uh Oh, Tomorrow's Producer Price Index Number Will Be a 'Redesigned' Index Number



From the BLS (my bold):
Effective with the January 2014 Producer Price Index (PPI) data release in February 2014, BLS will transition from the Stage of Processing (SOP) to the Final Demand-Intermediate Demand (FD-ID) aggregation system. This shift will result in significant changes to the PPI news release, as well as other documents available from PPI[...]

The FD-ID system will highlight the index for final demand, which measures price changes for goods, services, and construction sold to final demand: personal consumption, capital investment, government purchases, and exports. The composition of products in the final demand price index differs from that of the finished goods index in two major respects. First, it includes government purchases and exports. Second, it includes services and construction, which are not reflected in finished goods.

7 comments:

  1. It would be very interesting if an economist could go and retroactively apply this new method to historic numbers. Then he could show--once apples are turned into oranges--that these newer, "better" numbers are simply horse shit designed to fool people I to thinking we're better off than we are.

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  2. This organization deserves a name change: Bureau of Statistics (BS).

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  3. "it includes government purchases and exports."
    How is a purchase and export "Production." And in that government purchases are a huge part of today's U.S. economy it will radically change things.
    "it includes services and construction, which are not reflected in finished goods."
    A very grey area trying to figure out what and how a 'service' equates to production (and think of the leeway for those that manipulate this data). Construction would seem to utilize produced goods (many of which are imports), so again this will be inaccurate and manipulated.

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  4. Of course any time a index is changed, it's to mislead the public. The govt would never make a change to report economic data more efficiently. They are only doing it to cover up the fact that the Austrian school is always right. Hyperinflation is already here and you just don't know it.

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    1. good points Jerry!

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    2. Re: Jerry Wolfgang,
      -- Of course any time a index is changed, it's to mislead the public. --

      That's just absurd! These indexes mislead the public from the very beginning, so changing them cannot have that purpose. It would be redundant!

      No, the reason it is changed is because the change is meant to keep misleading the idiots who still think these indexes actually mean something - case in point, YOU.

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