I was struck by the reporting on the increases that the Commerce Department reported for March consumer spending and the personal consumption expenditure deflator (PCE). Both figures were presented as being higher than expected. It seems that the financial markets were surprised by the news, since the yield on 10-year treasury bills rose by 6 basis points.
I am surprised by the surprise because the spending and price data released on Monday was not new information. It was actually imbedded in the first quarter GDP data that was released on Friday. The Commerce Department needed to include March data for both consumption and inflation in order to compile GDP data for first quarter data. This means that anyone who cared could have pulled out the previously released data for January and February (which is subject to revision) to calculate the numbers that would appear in the March release.
I have occasionally done this myself when I had no better use of my time. Unless the first two months data are revised by a large amount (unusual, but not impossible) it is possible to know almost exactly what the data for the third month will look like before it is officially released.
Given the six and seven figure salaries that stock market analysts earn, it seems absurd that they would ever be surprised by data that could be known in advance with simple arithmetic. I guess this shows that there are still good-paying jobs for unskilled workers.
(Tip for this week: productivity growth will be close to 2.0 percent. The reason is a reported first quarter surge in the number of self-employed workers will lead to hours growth at close to a 4.0 percent annual rate.)
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