25 May 2008

Completely Bogus Government Statistics: Seasonal Adjustments to Inflation Edition

I point you to some good work by Barry Ritholtz, who notes:
For example, crude energy materials "only" advanced 4.1% in April, with crude petroleum gaining 4.5 % and natural gas prices rising 4.3%. After the seasonal adjustments, these prices appeared rather odd: They showed energy prices falling by 0.2%, while gasoline costs dropping 4.6%.
It turns out that this all goes back into the numbers in July.

According to this article, if prices were flat, we would still see a 16.3% increase in July....Not pretty.

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