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One Year $175.00 Six Months $89.00 ShadowStats Newsletter “John Williams’ Shadow Government Statistics” is an electronic newsletter service that exposes and analyzes flaws in current U.S. government economic data and reporting, as well as in certain private-sector numbers, and provides an assessment of underlying economic and […]

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Special Commentary No. 1430
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March 23rd, 2020

• Financial-System Insolvency Laid Bare by the Pandemic, as Circumstances Accelerate Towards a Hyperinflationary Great Depression
• Federal Reserve Moves Towards Unlimited Currency Creation, While the Federal Government Promises Unfettered Deficit Spending, All Looking to Bailout Wall Street and the Banks, and to Provide Some Consumer Liquidity Relief
• Extraordinarily Unstable Circumstances Continue in the Global Markets; Economic, Financial-Market and Political Turmoil Likely Have Just Begun, Despite Ongoing, Massive Systemic Manipulations and Interventions
• Holding Physical Gold Remains the Primary, Fundamental Hedge Here; Gold and the Swiss Franc Should Continue to Hold Their Own Against What Increasingly Should Be a Faltering U.S. Dollar
• Recession/Depression, Triggered by Pandemic-Exacerbated Systemic Instabilities, Should Begin to Surface With the March Labor Data Release on April 3rd
• From Pre-Pandemic Headline U.3 Unemployment Low of 3.5% in February 2020, U.3 Could Hit 5% in March and 25% in April (with April ShadowStats-Alternate at 43%)
• Quarterly Contractions/Collapses Loom for First- and Second-Quarter 2020 GDP, Respectively, of About 8% (-8%) and Nearly 40% (-40%), Assuming Current Pandemic Constraints Remain in Place, Accompanied by Major Government Stimulus through June
• Although Being Overwritten by the Crises-Driven Economic Contraction, the Still Deepening Pre-Crises Downturn Seen in February 2020 Freight Activity, Retail Sales and Production Provides a Soft Underbelly for the New Recession
• Reliability Issues Loom With Pandemic-Disrupted Economic Surveying and Numbers
 More …

Special Commentary No. 1429
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March 15th, 2020

• FOMC Liquidity Panic: Federal Funds Rate Cut a Full Percentage Point on March 15th to a Range of 0.00% to 0.25%, Following a March 3rd 50 Basis-Point Cut to a Range of 1.00% to 1.25%
• Federal Reserve Also Has Lined Up Dollar Liquidity Support With the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank
• This Signals Extraordinarily Unstable Circumstances at Work in the Global Markets
• Nonetheless, Physical Gold and the Swiss Franc Should Continue to Hold Their Own Against What Likely Will Remain a Faltering U.S. Dollar
• Pandemic and Oil Price Disruptions Are Overwriting and Seriously Deepening What Already Was an Intensifying Economic Downturn
• First- and Second-Quarter 2020 Quarterly GDP Contractions Should Rival or Exceed Great Recession Numbers
• Economic Growth Could Stabilize at Lower Levels by Year-End, Depending on How the Systemic Shocks Play Out
• Economic and Financial-Market Disruptions Have Just Begun, Despite the Extraordinary Systemic Manipulations and Interventions
• Federal Reserve Viability and Loss of Systemic Control Have Been Brought to a Head, With the Coronavirus Whirlwind Ripping Away the Veneer of Post-2008 Financial- and Banking-System Recovery and Stability
 More …

Flash Update No. 25
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March 1st, 2020

• A Rough Couple of Weeks for Stocks, While Physical Gold and the Swiss Franc Held Their Own
• Third-Quarter 2019 Gross Domestic Income Growth (Theoretical GDP Equivalent) Just Revised Lower to 1.2% from 2.1%, Due to Employment/Payroll Revisions; Negative GDP Revisions Keep Lining Up for the July 30th Benchmarking
• Fourth-Quarter 2019 Quarterly Declines in Real Retail Sales and Manufacturing, and Deepening Annual Collapse in Freight Activity, All Preceded the Coronavirus Crisis
• FOMC NEEDS TO CUT INTEREST RATES NOW: Underlying Consumer Fundamentals and Activity Continue to Suffer, Separate from Any Pandemic Considerations
• Pre-Pandemic Consumer Financial Woes Reflect Excessive 2017-2018 Rate Hikes, Complicated by Insufficient, Subsequent FOMC Rate-Relief Easing
• Yet, Wall Street and the Fed Chairman Have Claimed the Consumer Economy Continues to Boom, that the Consumer is Financially Healthy and Happy
• Unfolding Pandemic Now Gives the Fed a Headline Excuse for Easing, Without Having to Admit to its Own Economic/Monetary-Policy Malfeasance
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Flash Update No. 24
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February 24th, 2020

• UPDATED SHADOWSTATS ALERT: Unfolding Pre-Pandemic Recession Remains in Play; Flight to Gold Should Intensify
• Today, Unfolding Fears of a Corona Virus Pandemic Exacerbated Otherwise Mounting Fears of a U.S. Recession, and Related Risks of Intensifying Flight from the U.S. Dollar and Stocks, to Gold and Silver
• Dow Jones Industrial Average Declined by 1,031.61 (-1,031.61) Points, Largest Drop in Two Years
• London Gold Spiked to a Seven-Year High of $1,671.65 per Troy Ounce
• ShadowStats ALERT: Intensifying Flight from Stocks to Gold Remains Very Much in Play in the Weeks Ahead
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Flash Update No. 23
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February 18th, 2020

• January 2020 CASS Freight Index Dropped by 9.4% (-9.4%) Year-to-Year
• Current, Deepening Annual Declines in Freight Activity Increasingly Resemble the Onset of the Great Recession
• Deepening Annual Declines in Freight Activity Are Not Consistent With a Booming Economy
• They Also Do Not Support FOMC Claims of Sustainable Moderate Economic Growth in Place
• They Are Consistent With Fourth-Quarter Contractions Seen in Industrial Production and Real Retail Sales
 More …

Flash Update No. 22
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February 18th, 2020

• A Second Straight, Negative Holiday-Shopping Season, as the Revised Fourth-Quarter Real Retail Sales Contraction Deepened to 0.6% (-0.6%), the First Quarterly Downturn Since the 2014 to 2016 Mini-Recession
• January 2020 Real Retail Sales gained 0.1% in the Month, but Declined by 0.1% (-0.1%), Net of Revisions, Amidst Slowing Annual Growth
• Downside Historical Revisions to Retail Sales Should Surface in the Just-Scheduled April 27th Annual Benchmarking (See Flash Update No. 21)
• Collapsing off Peak Levels, Industrial Production Capacity Utilization Timed the Great Recession Onset of December 2007, the 2014-2016 Mini-Recession Onset of December 2014, and November 2018 Onset of the Currently Unfolding Recession
• January 2020 Mining Activity Rose, but Weaker Manufacturing and Irregularly, Weather-Depressed Utilities, Knocked Aggregate Production Lower by 0.3% (-0.3%) in the Month
• Downside Historical Revisions to Manufacturing (Industrial Production) Loom in Annual Benchmarkings Scheduled for This Summer
• On the Upswing for Four Straight Months, January 2020 Unadjusted Year-to-Year Consumer Price Inflation (CPI-U) Jumped to a 15-Month High of 2.5%, from 2.3% in December 2019
• Subject to Revised Seasonally Adjusted CPI and Payroll Revisions, Related January 2020 Year-to-Year Real Earnings Held Flat for All Non-Farm Employees
 More …

Flash Update No. 21
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February 11th, 2020

• First Major Economic Benchmark Revision for 2019 Signaled Large Downside Revisions Pending for the GDP and Retail Sales
• Perfect Storm: Hit by the FOMC Tightening Too Severely in 2018, Liquidity-Strapped Consumers Cut Retail Spending, But Full Reporting Was Masked by 2018/2019 Partial Government Shutdown Data Disruptions
• Massive, Corrective Downside Payroll Employment Benchmark Revisions Reduced Previously Reported Annual Jobs Growth by 20% (-20%)
• Benchmarked Jobs Count Cut by 514,000 (-514,000) in March 2019, By 422,000 (-422,000) in December 2019
• Retail Employment Revised Sharply Lower, Plunging for 32-Consecutive Months; Year-to-Year Jobs Growth Has Been Negative in Every Month Since June 2017, Except for One, Which Was Flat
• Massive, Corrective Downside Benchmark Revisions for 2018/2019 Retail Sales and the GDP Should Follow in June and July 2020
• Separately, Regular Year-End Census Bureau Adjustments Reduced the Estimated U.S. Population by 811,000 (-811,000) in January 2020
• As a Result, December-to-January and Year-to-Year Comparisons of Headline Household Survey Counts Are Not Meaningful, Without Special Adjustment
• January 2020 Headline U.3 Unemployment Rate Rose to 3.58%, from Its 50-Year Low of 3.50% in December 2019, Otherwise Still at a 50-Year Low; Broader U.6 and ShadowStats Unemployment Rates Each Jumped by 0.2%
 More …

Flash Update No. 20
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February 6th, 2020

• 2020: A Year of Deepening Economic, Fiscal and Financial-Market Turmoil, Despite a Currently Booming, Headline Economy and Stock Market
• The Fed Continues to Prop the Banks and the Financial Markets, But Not the Consumer, Who Ultimately Drives Sustainable Economic Activity
• A Financially Healthy U.S. Consumer Remains Key to Stable Domestic Growth
• Despite a 50-Year Low in Headline Unemployment, the FOMC-Impaired Economy Thwarts Consumer Liquidity Growth; December Median Real Household Income Declined for a Second Straight Month
• Coincident With the January 2020 Payroll Reporting, 2019 Payroll Benchmark Revisions Still Should Be Negative
• Negative December Real Trade-Deficit Revisions Promise Some Downside GDP Adjustments
• Annualized Initial Real Fourth-Quarter GDP Growth of 2.08% Appears Overly Optimistic Against Underlying Hard Numbers
• 2019 Annual GDP Growth at a Three-Year Low of 2.33%, Faces Downside Revisions from Various Benchmarkings in Coming Months
 More …

Flash Update No. 19
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January 29th, 2020

• No Changes, Just Continued Pablum Out of the January Federal Open Market Committee Meeting
• Sustainable Moderate Economic Growth Purportedly Continues
• Targeted Federal Funds Rate Held in Check
• Reserve Building, Balance Sheet Expansion to Continue into Second Quarter
 More …

Special Bullet Edition No. 19a
January 28th, 2020

• 2020: A Year of Deepening Economic, Fiscal and Financial-Market Turmoil, Despite a Headline Booming Economy and Stock Market
• The Fed Continues to Prop the Banks and the Financial Markets, But Not the Consumer, Who Ultimately Drives Sustainable Economic Activity
• Expected January FOMC: Continued Boosts to Banking-System Liquidity, but No Rate Cut for Liquidity-Strapped Consumers, Who Were Hit by the Overly Aggressive Fed Rate Hikes in 2017-2018
• Fourth-Quarter 2019 Numbers Showed Quarterly Contractions in Real Earnings and Real Retail Sales, Including Full-Year Declines in Real New Orders for Durable Goods, Manufacturing and Freight Activity
• There Is a Fair Shot at Weaker Than Expected Fourth-Quarter GDP, Despite FOMC Claims of Sustainable Moderate Economic Growth in Place
• The U.S. Economy, Federal Government and the Federal Reserve System Still Have Not Recovered from the 2007-2008 Banking Collapse and Bailout
• Harsh Reality Remains That the Fed Stunted U.S. Economic and Fiscal Potential, With Its Handling of the Banking System Collapse and Bailout of 2007-2008
• Extremes of Fiscal and FOMC Imbalances Threaten Massive Systemic Instabilities, Ranging from the Economic and Financial-Market Plunges, to Surging Domestic Inflation
• Modern Monetary Theory (MMT) Does Not Work: Headline Inflation Can Be Masked, But the Price of Gold Remains the Canary in the Coal Mine
 More …


DAILY UPDATE (March 29th to 30th – See Special Commentary, Issue No. 1430 for Discussion of Economic Forecasts and Hyperinflation Risks) Next Commentary: March 30th**, Next Data Release April 1st* // HEADLINE PANDEMIC ECONOMIC IMPACT SHOULD BEGIN TO SURFACE APRIL 3RD // Third-Estimate Fourth-Quarter Annualized Real GDP Growth Unrevised at 2.1%, With Initial GDI and GNP at 2.6% and 2.2%, Although Year-to-Year GDI Continued Weaker / CONFIRMING A STILL-DEEPENING, PRE-PANDEMIC RECESSION: In the Last Reporting of Major Pre-Pandemic Monthly Economic Numbers, February 2020 Real New Orders for Durable Goods Gained in Month, but Continued in Annual Collapse / February Cass Freight Index® Continued in Annual Decline for the 15th Straight Month, Down by 7.5% (-7.5%) / February Real Retail Sales Dropped 0.6% (-0.6%) Month-to-Month, With Annual Growth Slowing to 2.0% / 4q2019 “Holiday Season” Real Sales Decline Revised Deeper, Again, to a 0.8% (-0.8%) Quarterly Contraction, with 1q2020 on Track for a Real, Pre-Pandemic 0.1% Gain / Headline February Industrial Production Monthly Gain of 0.55% Was a Monthly Decline of 0.15% (-0.15%), Net of Extreme and Randomly Volatile, Weather-Driven Utility Usage / Pending Economic Impact of Pandemic: Likely the Deepest Headline GDP Drop in Modern History, Post-World War II Reporting / Separately, Beware of a Meaningful, Pre-Pandemic Downside July 2020 GDP Benchmarking! // ON THE PRE-PANDEMIC PLUS-SIDE: Beyond the Perpetual Headline Nonsense Monthly Volatility in Housing Starts, Building Permits and New-Home Sales Reporting, February 2020 Six-Month Smoothed Residential Construction and Sales Series Pushed to New Post-Recession Highs, Although Still Shy of Recovering Pre-Great Recession Peak Activity Respectively by 29%, 32% and 45% // INFLATION: February 2020 PPI Monthly Inflation Plunge of 0.59% (-0.59%) Was Deepest Since January 2015 / February CPI-U Inflation Was Constrained by Lower Gasoline Prices (Pre-Oil Price Collapse)

L A T E S T .. N U M B E R S .. “Unrevised” Third Estimate of Fourth-Quarter 2019 Gross Domestic Product (GDP) and Initial Fourth-Quarter Estimates of Gross Domestic Income (GDI) and Gross National Product (GNP) Showed Usual Inconsistencies (March 26th, Bureau of Economic Analysis – BEA). Fourth-quarter annualized real GDP growth effectively was unrevised at 2.13% [previously 2.10%], versus 2.10% in 3q2019 with year-to-year change unrevised at 2.33%, versus 2.07% in 3q2019. Initial GDI, the theoretical income-side equivalent of the consumption-side GDP, showed annualized quarterly growth of 2.59%, versus 1.23% in 3q2019 (having suffered an unusually sharp downside revision last month), with year-to-year 4q2019 at 1.98%, versus 1.53% in 3q2019. Initial GNP, which is GDP net of the trade balance in factor income (interest and dividend payments) showed annualized quarterly growth of 2.17%, versus 2.20% in 3q2019, with year-to-year 4q2019 at 2.56%, versus 2.19% in 3q2019.

These numbers all are pre-Pandemic and should see massive, Pandemic-driven quarterly contractions in 1q2020 and likely 2q2020, respectively rivaling the worst drop of the Great Recession, and the worst downturn in modern history (see discussion in Special Commentary, Issue No. 1430). Separately they all are subject to likely net-negative annual benchmarking on July 30th.

(March 20) February 2020 Real New Orders for Durable Goods Gained in the Month, With Continuing Annual Collapse (March 25th, Census Bureau). With total real New Durable Goods Orders continuing in year-to-year collapse on a rolling twelve-month average basis, and on quarterly and monthly bases — both before and after consideration of volatile Commercial Aircraft orders — headline economic circumstances continue to be more consistent with collapsing domestic freight (see the Cass® Freight section), manufacturing and economic activity, than with what had been the FOMC’s purported achievement of “sustainable moderate economic growth.” All the economic measures should begin to see sharp acceleration to the downside with March 2020 activity, reflecting initial Coronavirus Pandemic disruptions (see extended discussion in the March 23rd Special Commentary No. 1430).

(March 16) February 2020 Cass Freight Index® Plunged Year-to-Year by 7.5% (-7.5%), Following a 9.4% (-9.4%) Drop in January, Continuing the Steepest Pattern of Annual Downturns Since the Great Recession Onset (March 16th,, see the updated reporting at The deepening annual plunges in Cass Freight Index® activity have been the steepest since the early months of the Great Recession.

Once again, the collapse in activity here remains consistent with an unfolding pre-Pandemic “Recession,” not with the FOMC’s pre-Pandemic proclaimed “Sustainable Moderate Economic Growth.” The activity here, also has been consistent with the recently reported quarterly declines in Fourth-Quarter 2019 Real Retail Sales and Industrial Production. The Index’s consecutive monthly year-to-year declines and monthly declines in the 12-month trailing average held in place for the fifteenth straight month. Those year-to-year and 12-month-moving-average metrics neutralize seasonality in this unadjusted series. ShadowStats regularly follows and analyzes the Cass Index as a highest-quality coincident, leading indicator of underlying economic reality. Relevant to the ShadowStats comments following on Retail Sales and Industrial Production, and not otherwise reflected in Cass’s February reporting, Cass noted that the Port of Los Angeles had just reported February 2020 imports down by 23% (-23%) year-to-year. We thank Cass for their permission to graph and to use their numbers in our Commentaries, see ShadowStats Commentary, Issue No. 1430.

(March 18 to 24) On the Plus-Side, Amidst Consistently Absurd Monthly Volatility and Extreme Revisions, Six-Month Smoothed February 2020 New-Home Sales and New Residential Construction (Housing Starts and Building Permits) Continued to Trend Higher to Post-Recession Highs (Census, HUD). Headline New-Home Sales (March 24th) declined by a statistically worthless 4.4% (-4.4%) in the month, while Building Permits and Housing Starts (March 18th)declined in the month by meaningless, respective drops of 5.5% (-5.5%) and 1.5% (-1.5%). Yet, smoothed over six months, the meaningless monthly details continued to trend higher, hitting a new post-Great Recession highs. That said, the series remained shy respectively by 45% (-45%), 31.5% (-31.5%) and 28.6% (-28.6%) of ever recovering their pre-Great Recession peaks.

The more stable, better-quality National Association of Realtors® ( Existing-Home Sales (March 20th) rose by 6.5% in February, Boosted by a Downside Revision to January’s Activity. Six-month smoothed sales are trending higher, but are off their post-Great Recession high, and also still shy of ever recovering pre-Great Recession peak activity.

(March 17) Real February 2020 Retail Sales Dropped 0.6% (-0.6%) Month-to-Month, With Annual Growth Slowing to 2.0%, Against Upwardly Revised January Activity and Downwardly Revised December and 4q2019 Activity (Census). Fourth-Quarter 2019 “Holiday Season” Real Retail Sales revised to a deeper 0.8% (-0.8%) quarterly contraction, with First-Quarter 2020 on very-early track for a pre-pandemic 0.1% gain. This series should face extreme volatility in the next couple of months, reflecting pandemic-frightened consumers hoarding “necessary” and “survival” products, while postponing purchases of a less-urgent nature. The balance in activity of aggregate personal consumption over the next several months and quarters likely will be strongly negative.

(March 17) February 2020 Industrial Production Monthly Gain of 0.55% Was a Monthly Decline of 0.15% (-0.15%), Net of Continuing Extreme and Randomly Volatile, Weather-Driven Utility Usage (Federal Reserve Board). Where recent headline Industrial Production has been seesawed by extraordinary and unseasonable weather extremes impacting utilities, the headline gain of 0.55% in February 2020 Industrial Production, actual was a decline of 0.15% (-0.15%), net of the impact of a 7.12% rebound in weather-driven Utility usage, versus a monthly gain of 0.10% in the dominant Manufacturing sector and a 1.51% (-1.51%) drop in Mining (dominated by price-sensitive Oil and Gas Production and Drilling/Exploration). Those factors, combined with weakness in the Consumer Sector do not bode well for domestic production. On the other hand, pandemic-related loss of key, offshore supplies, could induce some needed return of manufacturing activity to the United States (again, see ShadowStats Flash Commentary, Issue No. 1430).

(March 11) February 2020 Consumer Price Index (CPI-U) Gained 0.09% in the Month, 2.33% Year-to-Year, Off January’s 15-Month Peak of 2.49% (BLS). Headline CPI-U inflation in February continued to be constrained by collapsing oil and gasoline prices, all of which were in advance of the Oil-Price Crash earlier this week, not due to FOMC policies, which likely will continue to shift in the days ahead.

By major category, seasonally adjusted February 2020 Food inflation rose by 0.37% in the month, versus 0.21% in January. February Energy inflation declined by 2.01% (-2.01%) in the month, having declined by 0.71% (-0.71%) in January, with February “Core” inflation up by 0.22%, versus 0.24% in January.

February 2020 ShadowStats Alternate CPI (1980 Base) Eased Minimally to 10.1% year-to-year, versus 10.3% in January, 10.0% in December, 9.8% in November and 9.5% in October. Graphs of that detail are found on the Alternate Data tab (also accessible by clicking on the mini-graph below), with the latest numbers and an inflation calculator also available there to subscribers.

S Y S T E M I C .. R I S K – (Updated March 26th) Economic and Systemic Crashes Should Intensify. Economic, FOMC and Market circumstances continue to evolve, but the broad outlook has not changed; market, economic, social and political turmoil are just beginning. The Coronavirus Pandemic containment efforts continue (1) to drive a near-term economic collapse, which should begin to surface with the headline March 2020 Payroll and Employment/ Unemployment reporting on April 3rd (see discussion in Special Commentary, Issue No. 1430), and (2) to drive unfettered U.S. dollar creation, with the Federal Funds Rate now targeted at 0.0%, the FOMC effectively re-opening unrestricted Quantitative Easing, and the Federal Government putting forth a $6 trillion support package in an environment where the Federal Deficit already is out control. The broad systemic risk unfolding here is for a Hyperinflationary Great Depression, to be discussed in pending ShadowStats Special Hyperinflation Commentary, Issue No. 1431.

The Federal Reserve’s Loss of Systemic Control Was Brought to a Head by the Coronavirus Crisis. Fed functionality was impaired severely, when systemic control was lost in the 2007/2008 bailout of the failed Banking System. The current, Pre-Pandemic Recession began with overly aggressive FOMC tightening in 2018, and lack of adequate, subsequent easing. That downturn now has been overtaken and is being overwritten on the downside by the Pandemic Crisis. Underlying issues with Federal Government and FOMC mishandled crises can be reviewed in earlier: and

The ShadowStats broad, general outlook remains in place for: (1) A rapidly intensifying U.S. economic downturn/ recession, reflected in (2) Mounting selling pressure on the U.S. Dollar, against currencies such as the Swiss Franc, (3) Continued flight to safety in precious metals, with upside pressures on gold and silver prices, and (4) Despite recent heavy selling, interventions and extreme volatility in the U.S. stock markets, high risk of continuing and intensifying major negative trends in the markets.

P O S T I N G .. S C H E D U L E S .. *SHADOWSTATS CONCURRENT ANALYSES OF NEW DATA: February 2020 Construction Spending will be published Wednesday, April 1st at 10:00 a.m. ET. ShadowStats analysis should post by 1:00 p.m. ET.

**SHADOWSTATS COMMENTARIES: ShadowStats Special Hyperinflation Commentary, Issue No. 1431, will publish as dictated by evolving systemic and economic circumstances, most likely March 30th.

ARCHIVES – VIEWING EARLIER COMMENTARIES. ShadowStats postings of November 2019 and before – back to 2004 – are open to all, accessible by clicking on “Archives,” at the bottom of the left-hand column of this ShadowStats homepage.

ALTERNATE DATA TAB provides the latest headline and exclusive ShadowStats Alternate Estimates of Inflation, GDP, Unemployment, Money Supply (Including the Updated ShadowStats Ongoing M3), and the ShadowStats Financial-Weighted U.S. Dollar.

Best Wishes — John Williams

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Some Biographical & Additional Background Information

Walter J. “John” Williams was born in 1949. He received an A.B. in Economics, cum laude, from Dartmouth College in 1971, and was awarded a M.B.A. from Dartmouth’s Amos Tuck School of Business Administration in 1972, where he was named an Edward Tuck Scholar. During his career as a consulting economist, John has worked with individuals as well as Fortune 500 companies.

Although I am known formally as Walter J. Williams, my friends call me “John.” For 30 years, I have been a private consulting economist and, out of necessity, had to become a specialist in government economic reporting.

One of my early clients was a large manufacturer of commercial airplanes, who had developed an econometric model for predicting revenue passenger miles. The level of revenue passenger miles was their primary sales forecasting tool, and the model was heavily dependent on the GNP (now GDP) as reported by the Department of Commerce.  Suddenly, their model stopped working, and they asked me if I could fix it. I realized the GNP numbers were faulty, corrected them for my client (official reporting was similarly revised a couple of years later) and the model worked again, at least for a while, until GNP methodological changes eventually made the underlying data worthless.

That began a lengthy process of exploring the history and nature of economic reporting and in interviewing key people involved in the process from the early days of government reporting through the present. For a number of years I conducted surveys among business economists as to the quality of government statistics (the vast majority thought it was pretty bad), and my results led to front page stories in 1989 in the New York Times and Investors Daily (now Investors Business Daily), considerable coverage in the broadcast media and a joint meeting with representatives of all the government’s statistical agencies.  

Nonetheless, the quality of government reporting has deteriorated sharply in the last couple of decades. Reporting problems have included methodological changes to economic reporting that have pushed headline economic and inflation results out of the realm of real-world or common experience.

Over the decades, well in excess of 1,000 presentations have been given on the economic outlook, or on approaches to analyzing economic data, to clients—large and small—including talks with members of the business, banking, government, press, academic, brokerage and investment communities. I also have provided testimony before Congress (details here).

An old friend—the late-Doug Gillespie—asked me some years back to write a series of articles on the quality of government statistics.  The response to those writings (the Primer Series available at the top-center of this page) was so strong that we started (Shadow Government Statistics) in 2004.  The newsletter is published as part of my economic consulting services. — John Williams


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