Economic News

[nycfan]

“… Deep inside its monthly inflation report on Friday,the Bureau of Economic Analysis said that the cost of legal services rose 1.8 percent in January. That was an unusually large increase, but not nearly as big as the double-digit gain that some forecasters were expecting.

The reason for the divergence: The agency, which is part of the Commerce Department, had changed the source of its data on legal prices, relying on wholesale prices from the Bureau of Labor Statistics rather than the consumer price data it usually uses.

… But in this case, the adjustment was enough to shave roughly a tenth of a percentage point off the monthly change in the core Personal Consumption Expenditures price index. That is a meaningful difference to investors, who track even tiny moves in the index for hints of when and how the Federal Reserve will next adjust interest rates. The central bank officially targets the P.C.E. index, not the better-known Consumer Price Index, when making policy decisions.

The bureau provided no public disclosure of the change. Economists learned about it only when they reached out to the agency to understand why their forecasts had been so far off.

… In January, the C.P.I. for legal services jumped more than 11 percent, according to analyses of data from the Bureau of Labor Statistics conducted by private-sector forecasters.

… “On its merits, you can defend the change,” said Omair Sharif, founder of Inflation Insights, a forecasting firm. “Optically, it’s just not a good look in an environment when people are worried about political interference.”…”

 

[superrific]

You know, this meme is a joke that goes back a long ways. At least to Yogi Berra and probably much, much further back.

But it has always bugged me because the joke fails. "60% of the time, it works every time" IS logically distinct from "it works 60% of the time" and is in fact logically indistinct from "I ride the bus every Monday, Tuesday, Wednesday and Thursday" (assuming that 4/7 is close enough to 60%.

Neither here nor there. I just feel like griping a little

 

[superrific]

“… Deep inside its monthly inflation report on Friday,the Bureau of Economic Analysis said that the cost of legal services rose 1.8 percent in January. That was an unusually large increase, but not nearly as big as the double-digit gain that some forecasters were expecting.
Sharif, founder of Inflation Insights, a forecasting firm. “Optically, it’s just not a good look in an environment when people are worried about political interference.”…”

Yep, called it. I mean, I didn't know it would be this specific change in that specific market, but I've been thinking for a while that inflation is being underestimated because some of the adjustments are being applied too powerfully. This isn't EXACTLY that, but it's very close.

And I will further posit that legal services is not the only area where this is happening.