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By Williams' estimation, the government's calculation that unemployment was 5 percent in April and that inflation was 4 percent and economic growth 2 percent over the last year, is fantasy. It might even be disinformation.
An update e-mailed to ShadowStats subscribers at the beginning of the month warned darkly that "GDP (gross domestic product) and Jobs Data Appear Rigged" and "Despite Manipulated Data, the Recession Deepens."
By his reckoning, the economy shrank 2.5 percent in the year that ended in March, unemployment is really 13 percent and year-over-year inflation is 7.5 percent.
Government economic data are "out of touch with common experience. That's why people used to believe the numbers but no longer do," Williams said during an interview in his modest one-bedroom apartment near Lake Merritt.
According to Williams, government data are subject to two kinds of manipulation.
The first consists of technical changes in the way data are collected or interpreted. These have been fully disclosed, discussed in advance and reviewed by outside experts.
"Although it might make academic sense, it does not reflect the real-world experience of ordinary people," he argued. "The effect over time is to give a more rosy scenario."
For example, over the last 25 years, several technical changes have been made in the way the consumer price index is calculated:
-- In the 1980s, the Bureau of Labor Statistics switched from using house prices to equivalent rental prices in calculating homeowner inflation.