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Thursday, April 24, 2008
The Policy Implications of Statistics and Semantics
Go Figure
The Commerce Department announced this morning that home sales in the U.S. had slumped in March to their lowest levels in 167 months, or nearly 17 years. Today's figures are one of the last that may influence forecasts ahead of the Commerce Department's advance report on first-quarter gross domestic product due next Wednesday. Growth slowed to a 0.3 percent annual pace from January through March, the weakest in more than five years, according to the median estimate of economists surveyed by Bloomberg News. Story.
A gain of 0.3 percent GDP growth makes it a close call. If the first quarter GDP figures show negative growth, then we are offically on a "recession" track. Positive growth figures, and President Bush will be technically correct for now, in saying our economy is in a slowdown. But if the numbers come up recession, the already growing calls for a second stimulus package will grow exponentially.
And next Friday, the Bureau of Labor Statistics will release the unemployment figures for the month of April. Some, particularly those in the administration, have argued that unemployment in the current 5 percent range is not sufficiently alarming to warrant extensions or increases in unemployment insurance benefits. So these figures, too, will be closely watched, particularly by policymakers designing stimulus packages.
Can semantics actually determine policy? Are policymakers really numerologists?
Such is the symbolism of statistics -- a number is worth a thousand words.
Posted by Dana Chasin
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