MacroScope

India is in a cloud of economic optimism but its industrial data are in a permanent fog

Optimism the Indian economy will soon recover, despite no sign that it is anywhere near doing so, has increasingly led forecasters to overestimate industrial production growth.

Incessant official revisions to the data, after initial forecasts are proved wrong, also mean investors and companies don’t have a clear and timely view.

This too could be another thing holding back Asia’s third largest economy.

The latest industrial data came as a shock this week.

Factory output contracted by 2.2 percent in June from a year earlier, nearly twice as bad as the 1.2 percent fall predicted in the Reuters poll.

That was the eleventh month since January 2012, and the third in a row, in which economists have overestimated it.

China’s new economy needs fresh, reliable indicator on consumers

China’s transition into a domestic demand driven economy has kicked off with the government announcing long-awaited reforms, but it is missing a key element — an indicator to measure the success of the plan.

Long considered the ‘factory of the world’, China has a vast population that works in factories that produce everything from consumer and electronic goods to clothes, technology equipment and trinkets of everyday value.

Accordingly, its achievements are measured by economic indicators like exports, industrial production, gross domestic product and trade surplus, among others.

An unpleasant surprise may lurk in euro zone GDP numbers

The euro zone economy may be doing far worse than most economists want to believe. That’s not good news for a central bank trying to rescue the single currency through a hotly-contested bond purchasing programme that has yet to get started.

The latest flash purchasing managers’ indexes, which cover thousands of euro zone companies, suggest the third quarter will mark the euro zone’s worst economic performance since the dark days of early 2009, according to Markit, which compiles them.

They predict the economy likely shrank by 0.6 percent in the quarter that finishes at the end of this month.

India inflation consistently tough to pin down

High inflation is a drag on economic growth in the world’s second most populous country and matters immensely to over 400 million people, or over a third of India’s total population, who struggle to earn enough to feed their families three meals a day.

The particularly volatile nature of inflation in India has confounded policymakers and small business owners and has left economists, who are often running complex statistical models based on a dearth of reliable data, with a poor forecasting record.

To be fair, predicting economic data can be pretty tough in a country where collecting and reporting national statistics is still in its infancy stage. Provisional numbers are often completely revised away.

Only 45,000 U.S. jobs created in January: TrimTabs

Not that the battered U.S. labor market needs anymore bad news, but here it is: A new report that derives employment growth from tax data suggests recent strides have been even meeker than the official Labor Department data suggests.

The January jobs report is due out on Friday, and analysts in a Reuters poll are forecasting the jobless rate remained stuck at 8.5 percent while a median of 150,000 net new positions were created last month, down from 200,000 in December.

Not so fast, say analysts at investment research firm TrimTabs. They cull figures on tax withholding to generate what they say is a more accurate real-time reading of job market conditions. Their findings are grim:

from Changing China:

Love the Motherland, Love Statistics

The next time anyone questions the reliability of Chinese statistics, they should first spare a thought for the sensitive, earnest souls who gather the data. The National Bureau of Statistics asked its employees to craft poems to celebrate the 60th anniversary of the People's Republic of China. 

Like Chinese growth surging beyond economists' forecasts, their literary talents are sure to leave critics gasping for breath.

Here are three of the entrants in the poetry competition, "Statistics Affection: We Walk Together".