I was listening to an economic report on NPR earlier this week, and they talked about the economic indicators, "adjusted to remove the volatile food and energy sectors
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The same way we accept "unemployment" figures that deliberately eliminate those who are still looking for work, but whose unemployment checks have run out. We have to accept them because no one is providing us with anything else.
Volatility gives a false picture of the actual foundation. You can't see trends if they are obscured by data points with huge standard deviations. That makes these kinds of figures important, even though they might not show the entire picture.
For example, fresh vegetables at this time of year are drastically reduced in price across the entire country over what they are in the winter months when they all come from California and Florida. Therefore, if you are trying to understand whether the economy is better or worse today than it was in January, those price drops will cause you to think it is better than it really is. Better to take them out and compare other underlying factors that reflect the long-term trend rather than being swamped by expected and well-understood seasonal or other changes.
There are separate figures provided that include food and fuel. The media chooses which to report based on what story they want to tell.
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For example, fresh vegetables at this time of year are drastically reduced in price across the entire country over what they are in the winter months when they all come from California and Florida. Therefore, if you are trying to understand whether the economy is better or worse today than it was in January, those price drops will cause you to think it is better than it really is. Better to take them out and compare other underlying factors that reflect the long-term trend rather than being swamped by expected and well-understood seasonal or other changes.
There are separate figures provided that include food and fuel. The media chooses which to report based on what story they want to tell.
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