Thursday, May 22, 2008

Is Inflation Understated?

Many people believe that the government systematically understates unemployment and inflation, to give two of the most popular examples. To give one famous example, the consumer price index (CPI) famously excludes such items as food, energy, healthcare, and education. This is because they are "volatile."

Basically, numbers are never collected raw, they are interpreted in relation to theoretical models. These models contain some pretty questionable logic but they produce what critics charge is the point: "official" government data that either misses important events (such as the run up in house prices) or deliberately makes the world rosier than it is.

It's a theory versus real life smackdown!

There is a working paper from the Philadelphia Fed that discusses the shortcomings of the current CPI. Recently, the Bureau of Labor Statistics defended its methodology.

Here's our subject heading for the consumer price index (ignore the Cost of Living Index from ACCRA - it doesn't measure inflation. If you mess with the link, you'll see what I mean).

I'll also throw in this e-book link at no extra charge!

Another great way to read up on this is by using our Factiva business news database.

Tuesday, May 13, 2008

Dude, Where's the Books on My Topic?

I bet you have entered in a few key words into our catalog and wondered why nothing comes up. Very often, the answer is that we have material on your topic but it's been classified with some arcane, uncommon words. To wit:

If you're interested in selling your product on the internet, the correct subject heading is electronic commerce. 'Cos computers use the 'lectricity? Hmmm..... Nafta is another one with a bizarre official subject heading....

In real life, you can get around this problem by starting out with your keyword search, finding something that seems relevant, and then clicking on the title. Now you can see what their subject headings are....

Economic Indicators

Economic indicators collect data on significant or revealing economic activities and use that data to predict where the economy was, is or is going.

Those statistics that predict the future are called leading indicators. Those statistics that help us understand the past are called lagging indicators. It's important to remember that lagging indicators might help us understand the present and future. Or maybe not. Nothing is ever certain and anything can happen!

There are more economic indicators than you can shake a stick at! Most of them come from the government and have to do with what you'd expect: unemployment, housing sales, retail sales, inflation, etc...

Here is the quick guide to government collected economic indicators. You can also use our database Economagic.

A more detailed collection of indicators is from the National Bureau of Economic Analysis.

In another post we'll talk about some privately collected economic indicators and some weird ones!

The Housing Meltdown

For years, I couldn't figure out how everybody was paying for their houses. I just thought I didn't get it. Last time I mistrust my intuition. So now my intuition tells me that we'll have a train in the Austin metro area, get reality shows off the air, and I'll finally become an English rock star.

Here are the official government numbers about housing starts.

You've heard of the famous Case-Schiller index about housing prices? It's a standard measure of house value.

And that's not all!

There are a number of great, interactive maps that show the differing magnitude of declining house sales and deflating house values.

The New York Fed has a map that shows how your zip code is faring with foreclosures.

Do you know Zillow? Zillow is a website that shows you what homeowners are asking - and getting - for their homes.

A company called Realty Trac has an interactive map of foreclosures.