Private economists working for Wall Street firms try to estimate what upcoming economic data will show. Sometimes they get it exactly right, but it’s not as easy as you might think, and when the data are higher or lower than what their estimations had predicted, the market adjusts to the new information.
That is the origin of the “expectations”. It’s not coming from the government, it’s coming from the private sector, and they are trying their hardest to get it right. The constant implication that somehow these guys are “in the tank” for Obama by predicting retail sales a few ticks too high is one of the absurdities of the conservative internet. Instapundit is particularly wooden-headed on this subject.
Why would they have predicted flat retail sales given what is known even to the layman as noted in post # 7?
Don’t mistake my commentary for tin-foil hattery. I’m making the observation that they often miss the mark. You would think they’d learn and adjust their forecasting algorithms or fix what’s broken in their observational metrics.
It just seems that, when it comes to the weekly report on new jobless claims, 9 times out of 10, the report was ‘unexpected’, ‘weaker than expected’, etc.
My theory is that the profession of being an ‘economist’ is infested with people who are ‘bullish’ on the economy....primarily because they themselves start investing in the stock market at a very young age, and their personal financial planning is tied to it. So, they are almost always ‘confident’, and seeing/hoping for the best.
As a relative layman, its gets a little tiring to see professional ‘economists’ setting expectations too high. I swear, for the last 5 years, every November we hear about what a ‘great Christmas season’ it will be...I chuckle, and predict what excuses will be used in January, when the results are in.
Another thing I have noticed. Every economics class I ever took was taught as part of the Political Science department. These guys aren’t necessarily mathematicians, and they seem to trend towards being quite liberal. And, quite frankly, it shows - the ‘expectations’ seem to be higher when the president has a ‘D’ by his name.