Headquarters USA Website shadowstats.com | Owner Walter John Williams Current status Online | |
Type of site Analyses Government Economic & Unemployment Statistics | ||
Shadowstats.com is a website that analyzes government economic and unemployment statistics based on methodologies used by previous United States administrations, from the pre-Clinton era to the time of the Great Depression, using data such as the United States Department of Labor's Bureau of Labor Statistics U-6 unemployment rates that have been de-emphasised by traditional media outlets.
Contents
The site is authored by consulting economist Walter J. Williams, who holds a BA in Economics and an MBA from Dartmouth College. He is popularly known as "John Williams."
Claims
Regarding inflation statistics, Williams says that some of the biggest changes to the Consumer Price Index were made between 1997-1999 in an effort to reduce Social Security outlays, using controversial changes by Alan Greenspan that include "hedonic regression", or the increased quality of goods. Some other investors have echoed Williams' views, most prominently Bill Gross, who reportedly called the US CPI an "haute con job". John S. Greenlees and Robert B. McClelland, staff economists at the US Bureau of Labor Statistics, wrote a paper to address CPI "misconceptions", such as those of Williams.
Regarding unemployment statistics, Williams points out that under President Lyndon B. Johnson, the U-3 unemployment rate series was created, which excludes people who stopped looking for work for more than a year ago as well as part-time workers who are seeking full-time employment. Although the old unemployment rate series', which include part-time workers looking for full-time work and unemployed who stopped looking over a year ago, is still published monthly by BLS, the U-3 series is generally considered more meaningful and is the headline rate picked up by most media outlets. Williams calculates the U-6 rate as it was calculated until December 1993.
Regarding growth statistics, Williams reports that the official numbers for U.S. Gross Domestic Product (GDP) and jobs growth range from "deceptive" to "rigged" and "manipulated".
On July 24, 2008, Williams testified before the United States House Committee on Financial Services on the "Implications of a Weaker Dollar for Oil Prices and the U.S. Economy."
Acclaim
Republican politician and former United States Secretary of Labor Elaine Chao has supported the idea that the headline unemployment rate has been low due to low labor force participation rates. In 2012, Chao stated that the real unemployment rate was nearly 16 percent, referring to the U-6 unemployment measure published by BLS. Economist and former Assistant Secretary of the Treasury for Economic Policy Paul Craig Roberts who served during the Reagan Administration has cited John Williams' estimates in a review of real unemployment rates in 2013. Williams' work has also been cited by author Wayne Allyn Root. Williams has been featured on Fox Business Network and his work has been cited by CNBC.
Critique
A number of economists and finance experts have claimed that Shadowstats CPI is conceptually wrong and that their usage leads to easily disproven absurd conclusions.
University of Maryland Professor Katharine Abraham, who previously headed the Bureau of Labor Statistics, the agency responsible for publishing official unemployment and inflation data, says of Williams' claims about data manipulation that "[t]he culture of the Bureau of Labor Statistics is so strong that it's not going to happen." Steve Landefeld, former director of the Bureau of Economic Analysis, the Commerce Department agency that prepares quarterly GDP reports, said in response to an article about Williams, "the bureau rigorously follows guidelines designed to ensure its work remains totally transparent and absolutely unbiased." In the same article, UC San Diego economist Valerie Ramey, a member of the Federal Economic Statistics Advisory Committee, defended the methodological changes, claiming they were only made "after academic economists did decades of research and said they should be done."