Every day, millions of investors make decisions in part on economic data.
This morning, markets are digesting the news that GDP rose at a 3% annualized rate in the second quarter of 2025 – a sharp reversal from the negative read in the first quarter.
However, government statistics tend to get revised. Worse, today, an increasing amount of data that goes into those statistics isn’t even accurate – it’s an admitted guess:
Government statistics are increasingly based on guesswork, not facts.
In this instance, CPI, which drives inflation, is usually based on the costs of about 90,000 goods across the economy. But with one-third of the data now based on an estimate — or worse, a guesstimate — it makes CPI data suspect.
This makes other measures, like PPI, suspect, making it impossible for the Fed to accurately determine inflation or its trend.
~ Addison
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