Saturday, July 9, 2022

US #Labor Review #GDP #Stocks #Investing

Labor 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 1980’s. Administrations as far back as the 1980’s 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

The headlines tell us that worries about a recession are all wrong.

Headlines are about as useful to trading as rocking chair in a room full of cats, yet the majority follows them as if they reveal something. The economy is weakening fast. The Economic Activity Composite (EAC)'s ITCO and LTCO are both below zero (line 100 and 101 Trends Tab). ITCO, the intermediate trend for marginal economic activity, has reached -14%. It's falling fast towards -25%. Don't let the "everything is awesome" crowd BS you to death. The invisible hand does not care what the BLS is reporting.

The only mockery unfolding is the sell job that US and global economy is somehow improving. The components of the EAC are mostly real-time measures that unlike the spiritual incarnation of the jobs numbers from the BLS does not get modeled or revised.

While the economy is weakening, it does not mean that stocks will collapse. Reasons why stocks could defy logic will be addresses in other discussions.

Economic Activity Composite (EAC)

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