Seismic Musings

What happens when we can no longer trust our government? I’m not referring to the tsunami of lies. The obvious “Other countries will pay for tariffs” and “Drug prices are coming down 600%” lies. 

 

No, I’m referring to official data and statistics that are issued. If they can’t be accepted as true, then there is no possibility of planning for tomorrow let alone five years down the road. 

 

Now, I am not an economist, statistician, or data scientist. But the math isn’t mathing. 

 

Yesterday, the Bureau of Labor Statistics released the November Consumer Price Index (i.e. inflation) data. Obviously Trump wants his claim of lower prices vindicated. And, indeed, November’s stats showed a slightly lower than expected inflation rate around 2% but still within a range of what might be expected. 

 

But then the report proclaims inflation for the past year was 2.7% which is almost a half point lower than what analysts expected of 3.1%.

 

Ask any expert in economics and they will tell you that a 4% deviation from expectations is virtually unheard-of.

 

So how did it go from 3.1 to 2.7 for the year? Well, do you remember what happened with the government during October? It shutdown. No calculations made. No data reported. 

 

And do you remember what happened to the Commissioner responsible for the BLS reports in August? On August 1st Trump fired Secretary McEntarfer after a weak jobs report pissed him off and he installed a loyalist, William Wiatrowski, in the position. 

 

So, here’s what it appears has happened, although I am certainly open to enlightenment from those with greater expertise in economics. Instead of assuming that the October data was the average of the months around it, it appears Secretary Wiatrowski counted inflation in October as 0.0% and then used that to average in for the year. 

 

Yes, an inflation rate of 0 for October.

 

In other words, the government took eleven months of inflation data and divided by twelve to get the annual monthly average. Which is both deceptively incorrect and ludicrous. 

Select each picture to enlarge.