Bond Outlook [by bridport & cie, May 14th 2008]
In a week of “more of the same”, i.e. a continuing series of bad news with little impact on the rather sanguine mood of financial markets, we have an opportunity to consider the reliability of the economic data given to us, or should we say, “served up”? We have long criticised the focus on core inflation as a means of producing lower inflation data by excluding food and energy. It appears however that creative manipulation of US data is broader and goes back nearly 50 years. Kevin Phillips, a US writer and commentator, has written at length on this subject in May’s Harpers Magazine. He identifies the following: |
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The Phillips’ article ends by suggesting that, without the above changes, unemployment would be over 9% and inflation over 7%. |