The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Bond Outlook May 14th

The data used to calculate LIBOR may be improved by threatening the participating banks, but how can we deal with official statistics which have been creatively manipulated for decades?

Bond Outlook [by bridport & cie, May 14th 2008]

In a week of “more of the same”, i.e. a continuing series of bad news with little impact on the rather sanguine mood of financial markets, we have an opportunity to consider the reliability of the economic data given to us, or should we say, “served up”? We have long criticised the focus on core inflation as a means of producing lower inflation data by excluding food and energy. It appears however that creative manipulation of US data is broader and goes back nearly 50 years. Kevin Phillips, a US writer and commentator, has written at length on this subject in May’s Harpers Magazine. He identifies the following:

  • “discouraged workers”, those who would like to work but have given up looking, have been excluded from unemployment numbers since 1961
  • The “unified budget”, dating from 1969, combines the current cash surplus of Social Security with general tax receipts without any consideration given to the huge future liabilities of the Social Security system
  • The separation of core from headline inflation took place in 1973
  • “Owners’ equivalent rent” was introduced in 1983 and takes a large share of the blame for the current housing crisis

The Phillips’ article ends by suggesting that, without the above changes, unemployment would be over 9% and inflation over 7%.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree