On Sunday, I mentioned the Association of American Railroads “Rail Time Indicators.” It was not showing any green shoots.
That post, plus yesterday’s rant on the NAR (More NAR Nonsense), led to Doug Smith, Executive Director of The Sulzberger Leadership Program at Columbia School of Journalism, asking the following question: “Which of these associations are credible versus those that are NAR-like?”
The best way to determine that is to look at the data they release, juxtaposed against any quotes from their spokesman/economist. Are they spinning, sugarcoating or otherwise “prettying up” the news release? Once you get through that review, take a closer look at their disclosed methodologies. Are they defendable approaches that produce negative as well s positive outcomes? Or are they biased, and unlikely to ever say a bad word about their respective industry or economic sectors?
My favorite example of worthless data comes from the NAR — specifically, their Housing Affordability Index. During the entire housing boom and credit bubble, they NAR HAI showed only one single month when houses were considered “less than affordable.” That is simply a pathetic joke making that index worthless.
Other trade groups seem less biased and more reliable. The AAR seems like a legitimate group. As another example, let’s also take a look at the American Trucking Associations’ data. Specifically, the monthly advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index, released late yesterday afternoon. Following May’s 3.2% jump (seasonally adjusted of course) it fell 2.4% in June. This dropped the index to 99.8 (2000=100). The change in tonnage hauled by fleets before any seasonal adjustment was up 5.2% in June from May. Compare this with June 2008, when tonnage fell 13.6%. So far, the June 08 contraction was the largest year-over-year decrease of the current cycle, exceeding the 13.2 percent drop in April.
Now consider the “no-spin” statement from the ATA’s Chief Economist, Bob Costello that accompanied this data release:
“While I am hopeful that the worst is behind us, I just don’t see anything on the economic horizon that suggests freight tonnage is about to rise significantly or consistently. The consumer is still facing too many headwinds, including employment losses, tight credit, and falling home values, to name a few, that will make it very difficult for household spending to jump in the near term. As a result, this is likely to be the first time in memory that truck tonnage doesn’t lead the macro economy out of a recession. Today, many new product orders can be fulfilled with current inventories, not new production, thus suppressing truck tonnage.”
That seems to me to be straight talk — no spin, no wishful thinking — just the straight shit. You gotta respect any economist who doesn’t mince words and simply gives you his views, straight up, no chaser.
What are the better industry trade groups? Which non government, non-academic associations produce reliable, spin free data?
chart via ATA
NAR Housing Affordability Index is Worthless (August 13th, 2008)
ATA Truck Tonnage Index Fell 2.4 Percent in June
AMERICAN TRUCKING ASSOCIATIONS, July 27, 2009 4:45 PM
Tracking NAR Spin (April 23rd, 2008)
Worst. Forecasters. Ever?
The cockeyed optimists of the National Association of Realtors.
Slate, Monday, Dec. 10, 2007
NAR and Housing Forecasts (June 7th, 2007)