Need link to Inflated GDP Numbers Accusation

[Jane Austin]

Some time this week I read a comment by a (Goldman Sachs?) analyst that last fall's GDP numbers were inflated, and that the reason we haven't seen the jobs everyone expected after those numbers is because the numbers weren't real.

I thought I'd saved it but can't find it, and the story hasn't made it to the front page because of other events.

Can anyone help me find that article?

Thanks so much.

[teach1st]

1. This Miami Herald article might be it.

http://www.miami.com/mld/miamiherald/business/national/8258155.htm

<snip>

A growing number of discrepancies are emerging in America's economic numbers, including a dramatic over-estimation of manufacturing output. The latest analysis from Goldman Sachs suggests that the US economy may have grown by only about 2.2 percent in the year to the fourth quarter of 2003, considerably less than the official 4.3 percent.

Jan Hatzius, a senior economist at Goldman Sachs, has added his voice to a growing band who believe that the growth figures are overstating the true recovery of the US economy. Errors in calculating manufacturing output and income growth explain why unemployment, on all measures, has consistently disappointed the markets in recent months, the research claims.

Hatzius said: "Over the last year, the official data show real gross domestic product (GDP) growing a sturdy 4.3 percent. Yet, non-farm payrolls are up only 0.1 percent. It is hard to overemphasise how unusual this combination is."

[Robbien]

2. Good timing, I just finished reading that article. Here's the link

http://www.miami.com/mld/miamiherald/business/national/8258155.htm

and for those who have not read it here's a couple of paragraphs

Mar. 21 - America's buoyant economic recovery could largely be a statistical illusion, according to research released this weekend. Last year's growth may be half the official figure, which would explain the lack of job creation which is damaging President Bush's re-election chances.

A growing number of discrepancies are emerging in America's economic numbers, including a dramatic over-estimation of manufacturing output. The latest analysis from Goldman Sachs suggests that the US economy may have grown by only about 2.2 percent in the year to the fourth quarter of 2003, considerably less than the official 4.3 percent.

Jan Hatzius, a senior economist at Goldman Sachs, has added his voice to a growing band who believe that the growth figures are overstating the true recovery of the US economy. Errors in calculating manufacturing output and income growth explain why unemployment, on all measures, has consistently disappointed the markets in recent months, the research claims.

Hatzius said: "Over the last year, the official data show real gross domestic product (GDP) growing a sturdy 4.3 percent. Yet, non-farm payrolls are up only 0.1 percent. It is hard to overemphasise how unusual this combination is."

[Jane Austin]

3. Thanks a million . . .

. . .to both of you!

I'm definitely going to save it this time. :)

[cmayer]

4. I think it's of passing concern.

The 3Q results were an incredible 8.2 percent. They were quarterly results only and reflected the results of tax rebates and military spending on Iraq. They could not be used to judge future quarterly results.

Today the 4Q results were finalized at 4.1 percent, which is pretty good.

There may be job growth soon. As a tactic, if it happens, we will have to emphasize the quality of the jobs created. (High wage/benefits vs. flipping hamburgers.)

(on edit) Someone posted the link while I was typing this. Nevermind.

[Jane Austin]

5. But doesn't it show the Bushies

messing around with reports to make themselves look good - - yet again?

Thanks for you response, too.

[cmayer]

6. I would guess that it is not actual manipulation

I read the Miami Herald article and my take on it is that the figures are not wrong because of sinister manipulation. It seems that the economy is doing some things that have never been seen before and the old standard measure is no longer accurate.

But of course, it could be manipulation, if they thought they could get away with it. And they seem to think they can get away with anything.

Nah...I'll go with my first answer.