Statistics: The Labor Department says the index will be revised because
of a computer software problem.
Statistics: The Labor Department says the index will be revised because
of a computer software problem.
From Reuters
WASHINGTON--A seemingly tiny error the government
disclosed Wednesday of its measure of U.S. inflation is a worry to economists
who see it as a potential red flag for the reliability of vital economic
data.
The Labor Department said that because of
a computer software problem it will revise its key measure of U.S. price
performance, the consumer price index, for the period from January through
August.
It said "the general pattern of consumer price
behavior" this year was unaffected, but the department's admission raised
questions whether key agencies have enough money to do their jobs properly.
"We're at a critical stage of the game in
which accurate economic data is crucial so it has to be right," said economist
Diane Swonk of Bank One Corp. in Chicago.
Just a rumor of a problem with statistics
can shake the confidence of financial market participants and business
decision-makers who use it for everything from portfolio management to
decisions on investments in plants and equipment, she said.
Meanwhile Wednesday, the government released
new statistics on the orders made in August for costly durable goods, a
report consistent with a slowing but still strong U.S. economy.
The Commerce Department said the value of
new orders for durable goods such as cars and furniture designed to last
three years or more climbed 2.9% in August to a seasonally adjusted $216.12
billion. That came after a 13.1% plunge in orders in July.
August's increase in durable goods orders,
the third in four months, was driven by a 6.5% gain in transportation equipment,
spurred by orders for aircraft. Orders for defense capital goods also rose
a massive 18.2%.
The Labor Department's Bureau of Labor Statistics
said it had found an error in software used to calculate rents and owners'
equivalent rents of the CPI. It said that, as a result, from December through
August the CPI rose by 2.7% on a non-seasonally adjusted basis instead
of 2.6%.
The BLS and the Commerce Department's Bureau
of Economic Analysis are the key statistics-gathering agencies that compile
intently awaited economic measurements of everything from price changes
to consumer spending and gross domestic product--the broadest measure of
total economic performance.
Copyright 2000 Los Angeles Times