Because of a Fed “flub,” data has been in the news lately.
First, though, let’s look at a Bureau of Labor Statistics (BLS) data story.
On a Thursday during 1998, a Wall Street economist noticed job creation data on the BLS web site that was not supposed to be there. Knowing the release date was the next day, he thought about calling clients so they could make some money by trading on the news. First though, he alerted a surprised BLS that reluctantly believed him when they saw the tables that had mistakenly been shared publicly.
Now, having upgraded security procedures, the BLS declares a lockdown when economists are processing the employment data. Office suites are isolated, trash pick-up stops, IT access is prohibited. Then, on the Friday of the 8:30 am release, reporters surrender all electronics as they enter a special room at 8 am to see the report. Just before the actual release, there is a countdown so that everyone, at the same milli-second makes the call to the outside world.
Demonstrating less security, the Fed releases policy committee minutes 3 weeks after a meeting, at 2 pm. Reporters get the documents one hour beforehand but pledge not to divulge the news until the official moment.
This time, though, the news was shared a day before its scheduled release by a Fed employee with a privileged contact list. The list included Goldman Sachs, Citigroup, JP Morgan Chase, the National Association of Realtors, the Bank of Japan, the White House.
We all know that no one should receive government data before everyone else but it happens, probably rather often. So, instead, I started thinking about excessive data. Committed to more “transparency” than his predecessor, Chairman Bernanke shares many more behind-the-scenes facts. As a result, a Bloomberg journalist reported that during April, 2012, “Three FOMC members think fed funds should be 0.5 percent at the end of 2014; two think it should be 1 percent; one thinks it should be 1.5 percent; two think it should be 2 percent; one thinks it should be 2.25 percent; three think it should be 2.5 percent; and one thinks it should be 2.75 percent.”
Whether premature or timely, is more information always productive?
Sources and Resources: Reading, here and here, that the Federal Reserve emailed policy committee meeting minutes before the formal release date, reminded me of this fascinating NPR Planet Money podcast about a similar “flub” at the BLS. It also takes us to this Bloomberg article, the source of my quote and my concern about fact overload.