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Economy

The Weakness Of Government Numbers, The Trouble In Japan

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By Douglas A. McIntyre Updated Published
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The numbers on the sharp GDP improvement in the Japanese economy for the third quarter were not correct. The Japanese government says that they were not even close.

Originally, the data showed the economy grew at an annual rate of 4.8%. That figure has been revised to 1.2%, which is barely better than stagnation. The major culprit for the error was an overestimate of capital investment.

The information was off by enough to lead to questions about economic data in other large countries. A number of experts have noted that the US November unemployment numbers which showed a loss of only 11,000 jobs are distorted. A major criticism is that the system does not effectively project data from companies that do not respond to the Bureau of Labor Statistics questionnaires. Some of the firms that do not respond may actually not be in business.

Government policy based on faulty data is in some ways no policy at all. The November jobs data in the US may be like the Japanese GDP number. It is one snapshot of one part of the economy at a given time. That makes the odds that it is wrong fairly high.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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