NEW YORK. Feb 1: As if natural disasters and winter storms weren't enough, analysts say upcoming revisions to several key US economic indicators will further cloud the outlook for first-quarter economic growth, reports Reuter.
Some changes, such as new seasonal adjustment factors for consumer and producer' prices likely will be minor. But changes to Industrial production. capacity utilisation and the rate of unemployment could significantly alter'perceptions of current economic momentum. Moreover, the changes may keep the federal reserve In a steady policy Stance for longer than anticipated.
"We will have all kinds of reasons to in heaven's name .not know what's going on," said Robert Dederick, chief economist al the Northern Trust Company. ."And. it will give anyone who doesn't want to do anything and excuse. "
-. An upward revision to the nation's unemployment rate of about 0.5 per cent Is widely expected, incorporating a larger share of women and discouraged workers Into the
labour force., ■
Most analysts say the revisions are overdue and no will provide a more accurate .picture of the labour market, s
Yet politically, higher unemployment could raise eyebrows in Washington, and limit the Fed’s policy options.
"The -changes to the unemployment rate may have political overtones, but all they're really telling us is that the unemployment problem has been a little larger than what the figures have been indicating." said Stuart Hoffman, chief economist at PNC Financial Corp.
Of greater Importance are changes to the Fed's industrial production and- capacity utilisation series, said Hoffman
"People have been talking about the economy being a little closer to bottlenecks (in production process) ... If the Fed tells us there is a little more capacity. It would suggest the economy is a little less inflation prone."
All of these revisions are due fairly soon, with the first corning on February 4 when the labour department releases January's employment data
For the consumer and producer price Indices, new seasonal adjustment factors will be included in the January fig urea, due February 11 and 17. respectively.