Economic Data Snowballed by Major Storms
At this point in the cycle, government data is particularly susceptible to noise (including the weather).
I apologize in advance if this week's column seems like a lot of excuses and whining, but some of the data problems that I've worried about for months have come home to roost. As expected, this week's set of economic data was seriously messed up with weather, seasonal adjustments, and data that just didn't seem to match up with what our analysts were hearing from their companies.
There are times in an economic cycle when it's just better to listen to the government's numbers, as companies seem too shell-shocked to see improvement under their own noses (as was the case last spring). Then there are times when it is better to listen to companies and analysts because the changes in government data become smaller later in a recovery, and the noise levels (weather, for example) become larger than the changes in the raw data. Now is one of those times.
There was positive news out of our transportation experts and retail team even as the economic news was generally mixed. That is why I am sticking with my moderately bullish forecast of 4% GDP growth for 2010. On the positive side, the GDP figure for the fourth quarter was raised to 5.9% from the first guess of 5.7%, surprising many analysts. Apparently we aren't going to have the "now you see it now you don't" GDP growth shown in the third quarter (the growth rate moved from the 3.5% initial report to just 2.2% in its second revision).
Robert Johnson, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.