corrente

Missed this one in all the excitement:

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."

The results of the alternative, survey-based method have also been weak, recording a 1.5 percent rise in household employment since November 2001, the smallest gain of any post-war business cycle, despite the dramatic rebound in US economic growth on the official figures.

Big flaws in the manufacturing data are responsible, according to the Goldman research. Real GDP for goods, which accounts for 33 percent of total GDP, has surged by 8 percent over the past year, the official figures say, more than double its 3.6 percent long-term trend. But these figures are in complete contradiction with the standard data for industrial production, a closely-related and far more reliable measure calculated using separate data.
(Knight Ridder via The Miami Herald)

Interesting, if true...