>As a result, a company’s data will tend to reflect the needs of its clients — it won’t capture the economy as whole.
If no one needs some data doesn't that imply capturing it is a waste of time and energy?
If no one needs some data doesn't that imply capturing it is a waste of time and energy?
You can't run a modern country without collecting real world data about the country's economy.
If employment is weak, you might cut staff yourself, or maybe cut costs elsewhere.
You might change your product mix to serve a different set of customers. You could change pricing.
No. It is not about feeling better.
The data is backward looking, sometimes by as much as 3 months, rarely less than a month old. The only way the "data" knows there is a reccession is if it stared 3/4 of a year ago.
If you are a CEO or running a business and you are blaming your business decisions on the stats from 3 months ago that came out today you should get out of the chair and let someone with a brain sit in it.
> Private companies are in the business of making a profit, and to do that they need to attract customers. Some customers are more profitable than others. As a result, a company’s data will tend to reflect the needs of its clients — it won’t capture the economy as whole.
Honestly, it is a very, very good paragraph. There is a slavish devotion to the idea that markets are efficient and that is the most desirable outcome in all situations. If you are in the business of being a government and running a country for all of your citizens, you need all the data, not just select aspects of it, and not just those that tell a particular story.
There is an infinite amount of data. And most of it is useless. Governments do not need to know how many fry cooks read exactly 3 novels from authors who names end with a letter in the first half of the alphabet in the last year.
So that is why it is important to understand that the government needs data for it's purposes (and not more than that). Restricting data to the narrow purposes of whichever company is willing to pay to produce select economic statistics will leave everyone worse off.
This isn't what the article said. It essentially said the data would be based off what people who use the data need. If the government needs some data it would still be able to get it.
Lets just start with something simple: Are you assuming that the government only needs what people are willing to pay for?
That's how it was with the space program, the military, and many utility companies that were privatized, yet it seems we just continue to hammer the idea that "private companies will do everything better".
I mean, the Fed uses BEA PCE data and not BLS CPI data for inflation, so it would seem consistent for them to use BEA employment data as well.
Of course. if manipulating the source of the popular headline figures doesn't have the desired impact on the Fed, Trump would eventually probably exert the same pressure on BEA.