Rationalization as an economic indicator

When economic data are reported in the press there are always experts who provide commentary on the data.  One of my favorite ways of evaluating the state of things is to see if the pundits let economic data speak for itself or do they instead rationalize the information to conform to a particular type of expected picture.  Here is an example from today’s Wall Street Journal regarding a big drop in durable goods orders in March:

“Joshua Shapiro, MFR, Inc. chief economist, assessed March’s data from a historical perspective, as opposed to analyzing the ‘often-volatile’ data results.  He pointed out that durable goods were revised upward for both February and January.

” ‘Leading indicators of underlying demand for core durable goods in general and capital goods in particular point to near-term strength, so the improvement in underlying activity in March after two mixed months should be seen as an outcome more indicative of actual conditions,’ Mr. Shapiro said.”

In effect, Mr. Shapiro has changed the context of the actual data.  The March durable goods data suggests something about last month, something bad.  But instead he says that we should pay attention to “leading indicators.”  He also uses neutral language to refer to negative March data when he says “the improvement in underlying activity in March.”  The durable goods data in March were actually negative, but instead he refers back to the “leading indicators” in March.  By doing this, it rationalizes the bad March data to be more in accord with a view he prefers.

This is just one example of data rationalization taking place in the business press right now.  When data cannot speak for themselves it is an indication to me of uncertain/sideways economic activity.  I feel like rationalizing is appropriate in some instances.  In fact, that is what analysts are asked to do: interpret data.  However, when the actual data is not addressed at all, contexts are switched, and alternative data are put forth as more relevant, it is inappropriate in my opinion.

Jason