Tuesday, January 15, 2008

Noisy Data

Econobrowser has a thoughtful post today illustrating the need to look at more than two periods of data to place that data in context. In this case December retail sales are reported down 0.4%, characterized by Marketwatch as "dismal", the Wall Street Journal as "surprisingly weak", and CNN as "a big drop". The Econobrowser post presents graphs and data demonstrated that this level of fluctuation occurs all the time, and that even looking at two month averages dispels the downtrend. The Capital Spectator puts the data in the proper context by looking at the rolling 12 month trend.

It's no wonder mainstream media numbers are falling when you need to go to the blogs for accurate commentary.