Thursday, June 04, 2009

The trend, the trend...why does the Bureau keep pushing forward the trend?

Here it is, the front page of yesterday's GDP release:

Note that, as usual, it emphasises the trend number ahead of the seasonally-adjusted number.

Note as well that just about no-one uses the trend number.

I wonder why?

Here's what the Bureau says on page 2 of the release:

As it puts it:

"The trend series in this publication should be interpreted with caution as the underlying behaviour of a number of series may have been impacted by global economic conditions and the Federal Government's Economic Security Package implemented in December 2008 and further fiscal stimulus measures implemented in March 2009."

Here's Chris Caton on the same topic:

"The trend series for retail trade has been suspended because of the increased volatility of retail trade as a result of the stimulus packages and the GFC. And I thought a major purpose of the trend series was to cut through extreme volatility!"

The trend is useless when it is really needed.

When it is not, it sometimes gives bizarre results.

Such as this:

This quarter the "trend" in Victoria's State Final Demand is falling. But the previous quarter it was rising.

Eyeballing table 25 suggests that in fact there has been no discernible trend for six quarters.