Puzzling

Things are getting interesting by the minute. The ADP report yesterday that shows the employment picture form the private sector perspective, came in much worse than expected, 37,000 new jobs vs 137,000 expected by consensus. But perhaps the most interesting news came from a article on the WSJ where economists question the quality of data on the inflation report. And it appears the hiring freeze imposed by Trump as recommended by DOGE, has limited the ability of BLS employees to do the field job of collecting prices. When that happens, they turn to “other” methods where the estimate or infere the prices in the report. In the chart below, you can see the percentage of estimated items, almost a third of the total. Which means that: (1) the numbers are less accurate, (2) they’re subject to manipulation and (3) they will be more volatile. This is important if we understand that salaries, pensions, rents, and even the Fed, take this data as an input to make calculations that ultimately affect almost everyone one way or another.

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