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Keeping a Clear View on the Economy: The Need for Reliable Data

0 1797 Market Intelligence

Bernie Markstein

Positions: Chief Economist
Well known for his work as Senior Economist and Vice President of Economic Forecasting and Analysis for the National Association of Home Builders (NAHB), Dr. Markstein has provided analysis on national and regional housing issues; tracking developments, trends in the multifamily housing market and forces affecting building materials prices.

Economists

RCD Chief Economist Bernard Markstein, Ph.D. wrote about the proposed legislation to reduce funding for the American Community Survey and other Government Statistics.

Have you ever hurried out of your house in the winter to find your car’s windshield covered with snow and ice? Even though you know the windshield should be scraped clean, you make a small hole to peer through and turn the defroster to high as you start to drive away. Your visibility is poor, so you drive slowly and carefully, praying the ice will quickly dissipate.

Sadly, that is where we are heading with our economic data. In this scenario, the road is the United States economy; the windshield is our economic data. With a clear, defrosted windshield, we can see where we are heading and make appropriate adjustments to stay on course; if we start with a frosted windshield, our view and path become unclear.

Okay, enough with the metaphor. U.S. economic data collection is under attack by the budget cutters. Despite the relatively low cost of collecting data (we are talking millions of dollars here, not billions) the ax is out for two vital data programs, the American Community Survey (ACS) and the Economic Census (EC).

Loss of the ACS and EC would not be the first loss of a vital survey. A few years ago, budget cuts resulted in the elimination of the Survey of Residential Additions and Remodeling (SORAR) that was used by the Census Bureau to help estimate residential improvements construction spending. The Census Bureau still produces these numbers, but they are subject to significant revisions. The accuracy of the estimates has been compromised to the point that its reliability is questionable.

My colleague, Ken Simonson, representing the Associated General Contractors of America and the National Association for Business Economics, addressed this issue at the Joint Economic Committee Hearing on the “Economic Impact of Ending or Reducing Funding for the American Community Survey and other Government Statistics.”

As the economy grows more complex, there is need for more and better data. If the U.S. wants to remain globally competitive, it must devote more resources to economic data collection, not less. Let’s keep the windshield crystal clear to give us the best view and understanding of our economy.   

Read Ken’s statement before the House Committee.

You can also watch a video of the testimony before the House Committee.

If you are interested in learning more about this issue, check out the National Association for Business Economics’ website.

If you would like to comment on this issue, here are links to find your U.S. representatives:  Senate and House of Representatives.

by Bernie Markstein

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