The U.S. economy cruised ahead in the fall, lost power in the winter and clicked back into first gear last spring.
No, scratch that. The U.S. economy streaked ahead in the fall, slammed on the brakes after New Year's and picked up modestly in the spring.
Or did it, perhaps, do something different altogether?
Strangely, no one is quite sure. The official statistics that shape the nation's view of its economy, influence policy decisions, dominate the evening news and electrify Wall Street traders often miss the mark--sometimes dramatically.
Highly publicized reports are routinely revised. Just Tuesday, new figures from the Commerce Department suggested that the 1990-91 recession was milder and the recovery more vigorous than depicted last year. The next day, the White House slashed an earlier forecast for growth this year.
Consumer inflation reports, by contrast, typically aren't corrected, although many analysts believe misleading U.S. price data lured the Federal Reserve Board toward an errant boost in interest rates a few months ago.
From specialized gauges of home sales and exports to overarching measures of jobs and growth, the story is much the same.
"We not only have a hard time telling where the economy is going, but we have a hard time telling where it is--and we're not sure where we were a few months ago," laments Michael J. Boskin, who was chairman of President George Bush's White House Council of Economic Advisers.
In large part, the culprit is the $6-trillion economy itself, a relentlessly evolving mishmash of goods and services that challenges the most capable of bean counters.
Small enterprises come and go, invisible as minnows in a murky sea. Services and technologies now flourish that data crunchers never dreamed of. Globalization, advances in quality, changing business practices and the far-reaching underground economy all conspire to throw off the government's best guess of what's going on.
"Hundreds of billions of dollars get based on these statistics, which--for those of us who know how unreliable they are--is a joke," said James F. Smith, an economist at the University of North Carolina, Chapel Hill.
Actually, the Commerce Department, the Bureau of Labor Statistics and the Census Bureau, which track many economic vital signs, are widely credited with doing a first-rate job--within the limits of their budgets. The government spends more than $600 million a year to take the economy's pulse, according to the White House Office of Management and Budget.
Nonetheless, the job is harder than ever, and the zigzags of statistics add a note of doubt to what's happening in the real world of factories, offices, shops and services, many analysts agree.
For instance, Bush was widely accused last year of overselling the national recovery, a charge buttressed by some of the data available at the time. But Tuesday's findings suggest the economy was picking up steam throughout 1992 and racing forward by autumn--more in line with Bush's claims.
"If I were George Bush, I'd demand a recount," declares Ross DeVol, an economist at the WEFA Group in Bala-Cynwyd, Pa.
Virtually every week, the media turn a new statistic into a prominent news story. When the revisions come later, even whopping changes may get little notice. To cite just one example, a tepid gain in May retail sales ballooned sevenfold by the time the final data came out--in an obscure footnote to July's report.
By design, initial estimates often are a hybrid of sketchy evidence and projection; the fuller, more-textured picture becomes available in the following months. News stories rarely emphasize such limitations, however, and an army of private economists offers authoritative-sounding commentary on the preliminary reports.
"It's very disconcerting to see people take a single piece of data and assume it means much more than the people who produced the data thought it means," said Janet L. Norwood, former commissioner of the Bureau of Labor Statistics (BLS) and now a senior fellow at the Urban Institute, a Washington think tank.
Many people don't want to wait for more detailed evidence, however. Public interest in economic statistics has soared in recent years, along with an expanding investment industry and the spread of electronic news services that offer a rapid-fire volley of the latest numbers--all against the backdrop of growing concerns about the U.S. economy.
"I'd like to see my own publication and others report the numbers a little more skeptically," allowed Stephen H. Wildstrom, senior news editor in Business Week's Washington Bureau. "But you can't stop reporting them just because they may be wrong."
Revisions, he added, deserve much more attention in news coverage than they often receive.
