Business: How to Read Those Statistics

Every winter the public is treated to a blizzard of year-end statistics purporting to measure the myriad business trends that affect the pocketbooks of everybody. Yet many Americans find that official Government indexes seem contradictory and confusing. The fault lies with the way statistics are compiled and reported.

Some, like the Consumer Price Index, are limited but fairly consistent and reliable estimates, while others, such as retail sales, inventories and quarterly productivity figures, are little better than ballpark guesses. One of the weakest is the index of leading indicators, which is supposed to foreshadow economic trends. Often the Commerce Department releases...

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