Thursday, August 19, 2021

US #Economic Review #GDP #Stocks #Investing

Economy Review

Much of today's economic data, time series centralized collected and produced, are highly unreliable. Statisticians employ well-documented techniques such as geometric smoothing, seasonal adjustments, substitution, double counting, and "hedonics" to adjust outcomes of economic time series as far back as the 1980s. As long as the public accepts the description of the economic backdrop by this data, and assumes politicians and central bankers are fully responsible for setting direction of them, the drive to massage, spin, and/or manufacture data driven outcomes remains high. Administrations as far back as the 1980s have utilized heavily modified and revised economic data for political gain.

Experienced teaches us that data can be whatever it wants to be in the short term. Statistical techniques, i.e. tricks, are often reversed through data revisions when nobody is looking. Revisions take place when Administrations or Administration’s polices goals change.

Subscriber Comments

Jobless claims reach fresh pandemic-era low of 348,000. Most information on the Internet is clickbait. It doesn't matter if the information is toilet paper or sacred parchment. Websites only care about clicks and advertising.

We flushed down clickbait material once we learned to track the invisible hand. The invisible hand moves long before headlines notice something has changed. While MSM focuses on falling jobless claims, as if that static tells us something, the invisible hand is busy telling us that marginal economic activity is contracting rapidly.

The Economic Activity Composite (EAC) measures marginal economic activity in the US. ITCO and LTCO reading above 0 tell us the economy accelerating. The economy is accelerating up or down at all times. Nominal growth levels aren't particularly useful.

So, BFD, the EAC tells us the economy is accelerating. That's true, but ITCO, an intermediate term measure of marginal activity is falling rapidly. The economy is no longer expanding once it falls below zero. ITC0 is currently equal to 0.5%

The rally in the dollar and bonds tells us the game is changing. ITCO falls below 0%, and we'll have confirmation that the invisible hand was right. Watch it close.

Economic Activity Composite (EAC Line 98 Trends Tab)

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