Monday, September 16, 2013

16/9/2013: More pesky stuff on PMIs v Reality...

Readers of this blog would know that I have been skeptical about the Purchasing Manager Indices capacity to accurately track changes in the economic output, especially during the times of unstable trend or trend shift. The latest on the topic was recently covered here: http://trueeconomics.blogspot.ie/2013/09/1092013-pmi-and-real-economy-goldman.html

And here's the handy chart from Pictet neatly highlighting the same problem:


Not being a conspiracy theorist, I would not suggest that latest changes in Markit reporting of PMIs - and in particular dramatic shift away from actually providing broader public and analysts community with some hard numbers and in favour of providing more 'interpretations' of the data plus often unreadable charts has anything to do with the breakdown in PMIs correlations with actual activity... but it would be nice to have more accurate and data-focused releases.

Note: full Pictet note on industrial production in the euro area is here: http://perspectives.pictet.com/2013/09/13/euro-areas-industrial-production-data-back-to-reality/
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