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Macro-economic Statistics Not As Real As Portrayed

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Ruy Lopez

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The article linked below talks about China and USA macro-economic statistics. The author claims that the numbers are not real. They have been adjusted cosmetically to give a better impression. The statistics are about electricity consumption in China and USA GDP.

http://www.zerohedge.com/news/2014-10-24/neither-us-nor-china-will-be-engine-global-growth-next-year

You'll have to give me some allowance. I'm trying to figure out how to post live links and charts together with this post and so far I have not succeeded. Am not a computer literate person.

The article says that:

1) Chinese electric power consumption has been trending downwards since 2010 and the decline year over year in Aug. 2014 is 3.5% This kind of data belies the Chinese GDP growth rate numbers. I agree with the author.

2) USA GDP is lower than what official numbers show and it has been that way for quite some time. The trick is to understate inflation rates so that the GDP deflator would result into higher real GDP figures. Again I agree, I have noticed this in the US a long time ago.
 
Oh good.

Macroeconomic "knowledge" from Zero Hedge.

Why don't you show us some paleontology from "Answers in Genesis", that has about as much legitimacy as the Goldfuckers.
 
Claiming the GDP deflator understates inflation because it makes real GDP look better is the perfect example of tinfoil economic analysis. Especially when the argument is based on growth numbers because a systematic and consistent understatement of inflation would have no effect of growth rates.
 
Ruy Lopez said:
The article linked below talks about China and USA macro-economic statistics. The author claims that the numbers are not real. They have been adjusted cosmetically to give a better impression. The statistics are about electricity consumption in China and USA GDP.

http://www.zerohedge.com/news/2014-10-24/neither-us-nor-china-will-be-engine-global-growth-next-year

You'll have to give me some allowance. I'm trying to figure out how to post live links and charts together with this post and so far I have not succeeded. Am not a computer literate person.

The article says that:

1) Chinese electric power consumption has been trending downwards since 2010 and the decline year over year in Aug. 2014 is 3.5% This kind of data belies the Chinese GDP growth rate numbers. I agree with the author.

2) USA GDP is lower than what official numbers show and it has been that way for quite some time. The trick is to understate inflation rates so that the GDP deflator would result into higher real GDP figures. Again I agree, I have noticed this in the US a long time ago.
Click to expand...

I don't see where these claims are particularly controversial. China has reported growth figures in the past that are truly spectacular in historical terms, but from my reading, these claims have been accepted with a good deal of skepticism for some time. Many people also suspect that US figures are massaged to produce a more optimistic figure than is warranted. For example, I believe I have read elsewhere that US energy consumption is also down in real terms which is inconsistent with reports of positive economic growth.

It seems clear in any case that the US economy has pretty much been running in place since about 2011 whether it is slightly positive or slightly negative isn't really crucial. Meanwhile China has some serious problems ahead herself, and hardly anyone is denying that. But it is also pretty undeniable that the economic fundamentals of the Chinese economy are much, much better than the US.

For that matter, the entire world economy seems headed for the doldrums with Europe and Japan also in very slow-growth/recessionary mode. But no one this side of Greece looks worse than the US with our huge budgetary problems and oversized current accounts deficit.
 
Energy input as a percent of the US economy has been dropping for decades. The drop has accelerated in recent years due to higher relative energy prices. (I think even the left accepts the laws of supply and demand operate with respect to energy...) I think it's a mistake to look at energy alone and make sweeping assumptions about the overall economy.
 
dismal said:
Energy input as a percent of the US economy has been dropping for decades. The drop has accelerated in recent years due to higher relative energy prices. (I think even the left accepts the laws of supply and demand operate with respect to energy...) I think it's a mistake to look at energy alone and make sweeping assumptions about the overall economy.
Click to expand...

Oh there are plenty of other indicators. I mentioned energy because that was the reference used regarding China. But there are other worrying signs. Retail sales are down. Mortgage companies are laying off personnel. Full time jobs are decreasing steadily and replaced with part-time jobs. McDonald's sales are down for something like 14 consecutive months if I remember correctly. McDonald's should be the last hit because they are cheap. You would expect more expensive restaurants to get hit first. Above all, capital spending remains low. Recessions begin in capital markets and recoveries begin in capital markets, but we aren't seeing the kind of investment up-tick that would be needed to begin feeling like a recovery is on the horizon.
 
dismal said:
Energy input as a percent of the US economy has been dropping for decades. The drop has accelerated in recent years due to higher relative energy prices. (I think even the left accepts the laws of supply and demand operate with respect to energy...) I think it's a mistake to look at energy alone and make sweeping assumptions about the overall economy.
Click to expand...
GDP/Energy use is dropping in the US. Energy use per capita is flat-line. I wonder how much of the increase in GDP with less energy is do to our importing most of our products? There is a lot of energy embedded in all our manufactured goods. We import 3 million tons of steel. How much energy was spent in mining the oar and transforming it to steel?
 
Ruy Lopez said:
The article linked below talks about China and USA macro-economic statistics. The author claims that the numbers are not real. They have been adjusted cosmetically to give a better impression. The statistics are about electricity consumption in China and USA GDP.

http://www.zerohedge.com/news/2014-10-24/neither-us-nor-china-will-be-engine-global-growth-next-year

You'll have to give me some allowance. I'm trying to figure out how to post live links and charts together with this post and so far I have not succeeded. Am not a computer literate person.

The article says that:

1) Chinese electric power consumption has been trending downwards since 2010 and the decline year over year in Aug. 2014 is 3.5% This kind of data belies the Chinese GDP growth rate numbers. I agree with the author.

2) USA GDP is lower than what official numbers show and it has been that way for quite some time. The trick is to understate inflation rates so that the GDP deflator would result into higher real GDP figures. Again I agree, I have noticed this in the US a long time ago.
Click to expand...

I'd double and triple check anything that comes from zerohedge with other sources. They were right about flash trading, but since then they have drifted into nuttery.
 
Comment from Duke Leto about Zero Hedge is invalid. Comment from Noble Savage is okay with me because we should verify if numbers are valid. It does not matter which website one uses as a source as long as the info is verifiably true. I have the same skepticism with data from the Fed and other US gov't agencies and so with China. The US unemployment statistic of 6% is notoriously propaganda. The gov't keeps changing the definition to make the number look better.

Also agree almost some 95 % with Boneyard Bill. US energy and petroleum consumption has fallen since 2009 and has not increased much since 1979-80. A big part of the reason is long-term energy conservation. Conservation technology and programs take time to materialize. My career is petroleum (Exxon and Phil. National Oil and also Dep't of Energy). I have seen studies where conservation after huge oil price increases takes place over some ten years. But the decline in US total energy and total petroleum SINCE 2009 is the result of economic stagnation. The media merely tells a nicer more soothing story.

Please check out this link to see the total energy chart (Energy Overview) and total petroleum chart (Petroleum and Other Liquids).

Annual Energy Review - US Energy Information Administration

Would appreciate if someone could tell me how to copy charts from a source and to paste the same on this board.
 
If the chart is an image file than just copy the link to the image file and use img tags.

example:

you find an graph image you like. right click and select "properties". that should bring up a box that contains the address to the image. copy the address by highlighting it, right clicking on it, and selecting "copy".

In your post over here use the <img></img> tags (note: replace the <> with [] for them to work. I used <> in order for it to show up in the post)

Here's an address to a graph i found: http://spot.colorado.edu/~kaplan/econ2010/section9/gifs/fig98.gif

To make that show up as an image I'd type: <img>http://spot.colorado.edu/~kaplan/econ2010/section9/gifs/fig98.gif</img> (remember to use [] instead of <>)

The end result will be:

fig98.gif


you can also hit "reply with quote" to this post to see the code for the image above ^
 
I don't have a dog in this fight, but I'm curious. I'll look into this during the day. On the use of electricity in China, Zerohedge gives Zerohedge as a source. The article was submitted by Phoenix Capitol Research which leads to a squeeze page. Which screams "Internet Marketing BS" to me. However, I'm still willing to listen to their argument, but I'm not giving them my email. If someone wants to and post the info, great.

Looking for other sources of electric use in China I find this:

Although China’s economic growth remained unchanged in 2013 from 2012 at 7.7%, the country’s electricity data tell a more positive story.

Chinese electricity production grew 7.6% last year to 5.2 trillion kilowatt hours, according to data released Monday by the National Bureau of Statistics. That was faster than growth of 4.7% in 2012.
Click to expand...

http://blogs.wsj.com/chinarealtime/2014/01/20/what-chinas-electricity-usage-says-about-growth/

For a source they cite the Chinese Government's website which I can't read.

http://www.stats.gov.cn/tjsj/zxfb/201401/t20140120_502086.html

At this point I am unconvinced by anything.
 
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