Sometimes I just can’t resist the urge to laugh hysterically. Apparently the Fed economists are distressed by the weak first quarter readings, so the San Francisco Fed observed that if you applied the seasonal adjustment twice then things looked much better – that is more like the forecast.
This afternoon BLS announced that it was going to take this idea and run with it, so we can look forward to a much better first quarter. But what I really want to know is if this entails breaking the rule that seasonal adjustments add up to zero over the course of the year? I suspect so – in other words, future reports are going to be what the Fed wants them to be without any recourse to reality.
I guess that’s one way to validate your forecasts, apparently already implemented by the global warning mafia – just adjust the data until it is “right.”