Sunlight Is the Best Disinfectant for 'Phony' Data

I touched on the current issue of economic data multiple times yesterday.

Here's a little bit more on the topic de jour.

I was forwarded this article: "The Fed Says It Is "Data-Driven." But the Data Isn't Any Good." I do not understand the myopic focus on the jobs numbers alone.

All the data matter.

That includes, of course, the CPI, which the BLS also calculates. The Mises guys, of all people, should be the first ones to realize this issue, although the author of this article seems to ignore it. More importantly, so is everyone else, including the guy squawking about the jobs data.

I understand why the current administration is not offering a peep about the CPI because they know which way the CPI is biased.

At any rate, if one data series is addressed in a vacuum, that leaves you in a place where the consequences could be worse.

This is the year 2025. There needs to be a better job done with regard to all the economic data, equally. I would start with inflation and the CPI, equally, because they are the two biggest buckets with the greatest consequences.

Whoever gets the job better be equally focused on all the data, and how it is collected and calculated. Whatever they do with regard to any changes in collection and methodologies, needs to be made fully transparent, to everyone. You let the politicians become further involved in this process, with no oversight, you know where it ends up. As it stands now China might have more realistic numbers than we do.

As to the decision making, that is a different issue. It has also been terribly flawed. It will never be perfect, but it should be better. The starting point that helps with better decision making is better data.

Sunlight is the best disinfectant.

This commentary was orginally posted in Doug's Daily Diary on TheStreet Pro.

At the time of publication, Kass had no positions in any securities mentioned.