Cooking the Books

I have in the past lamented the fact that our government is getting creative when it comes to reporting economic and employment numbers … see: Funny Numbers.

Now we have another instance of culinary accounting when it comes to Gross Domestic Product (GDP) reportage. It seems that the Commerce Department has moved something like $40 billion of Personal Consumption Expenditures (PCE, a large piece of GDP) from the first quarter of calendar 2014 into the third quarter. This PCE “adjustment” is also a bit of an anomaly in that it represents U.S. citizens’ spending on Obamacare. This adjustment in turn caused the first quarter of the year to look pathetic … basically 0% growth … and the third, to appear gangbusters (that +5% figure that gave us all a warm holiday glow) … see: Powerline Blog.

I think that some of our government’s numbers chefs might have misread their recipe  instructions this time around … lest why didn’t they put this $40 billion PCE “adjustment” into second quarter results where it would have done the most good politically … right before November’s national elections. 

I for one used mostly to trust what our government reported. Now we all need to rethink such trust … particularly under the current administration. The real problem is that, in trying to fool the American public, this administration may well end up fooling itself … with dire consequences.