Monday, October 30, 2006

The Perils of Writing Articles in Advance of the Facts

Cesar Conda have written a supply-side/Republican spin on the weak third quarter growth number. I'll return for a more indepth analysis of the arguments over the U.S. economy between Republicans and Democrats, but meanwhile I can't resist pointing out one embarrasing detail of Conda's article.

It seems obvious that Conda had anticipated a weak number and so in advance written a article with the supply-side spin on it, and that he also had the article approved in advance by NRO editors. The only thing added after the release of the numbers was the precise aggregate growth number of 1.6%

Why is that obvious? First of all because it appeared so rapidly after the release, less than an hour.

Secondly because it contains this line:
"Another one-time factor slowing economic growth was a significant drop in the production of motor vehicles in the third quarter."

Only trouble is, motor vehicle production did not drag down the number. In fact, to the surprise of most economists, it actually soared during that quarter according to the statistics. This was likely a statistical fluke which will be reversed during the fourth quarter, helping to make Nouriel Roubini's 1% or less forecast for the fourth quarter more realistic.

And it also illustrated the perils of writing articles in advance on reports not yet available. I don't think doing so is in any way immoral or anything like that, but as we can see with Conda's article, it opens for embarrasing factual errors.


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