The magic of seasonal adjustments: You’re paying less for gas
Been paying more at the pump lately? Not to worry. It’s just a figment of your imagination, new government data shows.
The U.S. Department of Labor’s Bureau of Labor Statistics tells us that gasoline prices fell last month by 2 percent. This was the very same month when crude oil prices surged 11.7 percent and there was NO pass through at the pump? Hmmmm.
Meanwhile, another branch of the very same U.S. government, the Department of Energy’s Energy Information Administration, contends average retail gas prices actually shot up 9.5 percent in April from March. Whoa!
Why the discrepancy?
It’s the magic of so-called “seasonal adjustments” — a practice employed by economists and other statisticians to smoothe out volatile month-to-month changes and give a supposedly clearer picture of the underlying trend within the numbers.
A look at the non-seasonally adjusted data from the BLS is closer to reflecting reality: It shows gas prices rose 5.6 percent last month.
Better, but that still understates the increase recorded by the EIA by 41 percent. Makes you wonder where the BLS buys its gas.