Every couple of days, the AP or Reuters or Bloomberg runs a story like this on the latest economic statistic to emerge from D.C. Now, put aside for the moment the growing suspicion you see in the blogosphere that the numbers are rigged; if the government's statisticians are deviously playing with these numbers you're probably not going to take the time to figure out which statistics they've diddled. At some point, you have to trust somebody's numbers, even if that trust may be betrayed somewhere down the line.
WASHINGTON - Consumer spending turned higher in September and incomes grew briskly, suggesting the economy is holding up well to the double blows of Hurricanes Katrina and Rita.
Forget the narrative and the explanations when you read these things and look at the numbers. For example, the numbers in this paragraph:
The 0.5 percent rise in consumer spending came after spending fell by that amount in August, reflecting the hit from Katrina, the Commerce Department reported Monday.
So consumer spending fell in August by .5% and rose .5% in September. So in other words, it returned to near its level in July. But since these numbers are based in real dollars rather constant dollars, the level of consumer spending was actually a little lower in September than it was a couple of months earlier. Short version: consumer spending weaker now than it was before the hurricane.
Americans' incomes, meanwhile, increased by 1.7 percent in September, the largest gain since December 2004, boosted in part by post-hurricane insurance payments.
This I don't understand. Insurance payments that compensate for lost property count as income? I guess this means if I want to make more money, forget a good education- all I need to do is crash my car or burn down my house.
So what does this story tell you? Basically, nothing of importance. It's a report on the month to month changes in a pair of statistics, and each of those statistics have value only when viewed as part of a longer trend over several or more months. Don't worry about stories like this on the way to the TV listings or sports section. In fact, I command you: SKIP THESE STORIES AND READ SOMETHING ELSE.
A better source for this information is the government itself. Or there's probably a web page out there that gives you all the important statistics put out by the Commerce Department, the BLS, and BEA, oil production and imports, etc. in a summary form. I haven't found it yet, but maybe I'll go look for it now....