What is going on? How can it be that stocks are soaring when the economy is crashing?
Read moreThe Fed’s Playbook Says Raise Rates. What if That’s an Obsolete Game Plan?
As congressional Republicans prepare to pass their tax bill , the Federal Reserve is about to say goodbye to Janet Yellen as chair. She’s had a good run: The United States and the world recovered from the financial crisis; steady, if unspectacular, growth resumed. Yet now the Fed is in an unusual spot as Jerome Powell takes over.
Read moreAn Economy of Chicken Littles
The “nattering nabobs of negativism” (a phrase we have to thank Spiro Agnew for, via William Safire) are out in full force again in the financial and pundit world. While there was only occasional mention of the economy during the Republican debate last week, both the GOP contenders and market mavens seem to agree that the world is going to hell. They have different reasons: The Republicans think the world has become dangerously unstable and that Obama is a cause. Investors, who have pushed global financial markets sharply lower (the S&P 500 is now down almost 10 percent since January 1) to the worst start to a year ever, see the root cause as heedless central banks, a U.S. economy grinding to a halt, and a collapsing debt-laden China.
Read moreGDP’s Going Down? That’s Good!
It’s our national mantra: GDP. Gross Domestic Product. No other figure rules our world more completely. We saw it again this week when the government released its latest revision of the first-quarter GDP numbers that showed the U.S. economy is contracting slightly. The only thing that’s now growing, it seems, is the fretting of pundits and economists over the new numbers. Their common cry: How do we get things moving again?
Read moreGDP and Other Mysteries
The statistics that drive our big-picture economic thinking — GDP, unemployment figures, and inflation rates, among others — have come to be regarded as nearly sacrosanct. Investors, policymakers, and everyday consumers rely on them to make decisions trivial and earthshaking alike, often measured in trillions of dollars. Zachary Karabell, in his book The Leading Indicators: A Short History of the Numbers That Rule Our World, traces the history of these numbers and questions how useful they actually are.
Read moreWhat Should Investors Expect in 2015?
‘Tis the season for looks back and looks forward. The financial world will be replete with such missives in the weeks to come, and that is actually all for the best. Given the fluid nature of money and planning and investing, regular assessments of what worked and what didn’t, how the year played out versus expectations, and what might lie just ahead, are vital. While it is true that forecasts about the future usually say more about present sentiment, thinking ahead does provide a framework for assessing likely risks and potential opportunities.
Read moreStop With the Fiction of a Binary Economy
The economy is a mess. It’s one thing many Americans and political candidates of all stripes seem to agree on. While it may be somewhat less of a mess than five years ago, the thinking goes, the current administration and Congress have done little to address the crushing challenges faced by large swaths of the American public.
Read moreAmericans’ Outlook on the Economy Just Doesn’t Square With the Facts
Six years after the beginning of the financial crisis of 2008–2009, the best that can be said about the public mood in the United States is that people are no longer catastrophically pessimistic. Instead, they are deeply pessimistic.
Read moreNo Sex, Please, We’re French
The government of France has just made what on the face of it appears to be a nonannouncement announcement: It will not include illegal drugs and prostitution in its official calculation of the country’s gross domestic product.
Read moreU.S. vs. China? Grow Up!
Last week, it was reported that China is poised to supplant the United States as the world’s largest economy much sooner than expected, perhaps as early as next year. These reports were derived from a new release by the World Bank that revised previous estimates of the size of China’s gross domestic product
Read moreThe Leading Indicators: Zachary Karabell
For too long, says author Zachary Karabell, we've adhered to outdated statistics for measuring economic health. Why follow a '50s road map in the 21st century when newer, more useful guides are available?
Read moreReality Has No Partisan Bias
In the wake of last week’s job report, there has been a flurry of new debate about what precisely is keeping job creation in the United States so anemic.The pivotal issue is whether the challenges facing the job market are cyclical or structural. The cyclical hypothesis is that we are still suffering an employment hangover from the financial crisis and sharp recession of 2008–09, made worse by limp or insufficient government responses.
Read moreGDP's Early Relevance
Economist Zachary Karabell explains the historical progression of the leading indicators in use today. Starting with World War II and continuing through the '50s and '60s, Karabell describes how the numbers came to be policymaking tools. This Carnegie Council event took place on March 11, 2014. For complete aud
Read moreOld Statistics, New Take
Economist Zachary Karabell suggests a different take on the available data and statistics, making it more relevant to the individual. National averages that are often relied heavily upon, he says, are rarely useful in any given individual's life.
Read moreZachary Karabell Discusses Flaws of Relying On Leading Economic Indicators
Zachary Karabell recently appeared on The Stu Taylor Show to discuss his new book, The Leading Indicators: A Short History of the Numbers That Rule Our World. The author of 11 previous books, Karabell has written for Reuters and The Atlantic, and regularly provides commentary on CNBC and MSNBC. A successful money manager, Karabell is the Head of Global Strategy at Envestnet, and the President or River Twice Research and River Twice Capital.
Read moreWhat's the Big Deal About Official Economic Data?
The monthly jobs report is big news on the first Friday of every month, swaying the financial markets and prompting immediate analysis. But should these numbers matter so much? A new book, "The Leading Indicators," argues we overvalue data like the GDP and inflation. Economics correspondent Paul Solman talks to author and analyst Zachary Karabell.
Read moreDon’t Trust the Economic Numbers That Govern Our World
Every week we’re bombarded by numbers about GDP or consumer confidence or some other leading indicator about our economic health and prosperity. Enough, says Zachary Karabell, these numbers don’t accurately reflect our world.
Read moreThe Leading Indicators
n today's uncertain economy, both the public and the world's leaders rely heavily on certain indicators to tell us how we are doing. Gross national product, balance of trade, unemployment figures, inflation, and the consumer price index determine whether we feel optimistic or pessimistic about our future and dictate whether businesses hire or hunker down, governments spend trillions or try to reduce debt, and individuals buy a car, get a mortgage, or look for a job. Yet few of us know where these numbers come from, what they mean, or why they rule our world.
Read moreThe Zombie Numbers That Rule the U.S. Economy
This Thursday the Conference Board, a global business association, released its monthly index of “leading economic indicators.” Like the unemployment and inflation, housing starts, G.D.P. changes and other figures, these numbers arrive in metronomic waves.
Read more(Mis)leading Indicators
Economic numbers have come to define our world. Economists and analysts loosely refer these as “leading indicators” and subscribe to the belief that these figures accurately reflect reality and provide unique insights into the health of an economy. But this has become less reliable than ever before.
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