They say numbers never lie, but what if we don’t have them in the first place?
The erosion of economic data over the past year poses a massive risk for individuals and businesses, writes BI’s Andy Kiersz. (As our economic data editor, he would know!)
You might scoff at the idea that there isn’t enough data. Sometimes it can feel like we have too much information on just about everything.
The crux of the issue is government-issued data, specifically from the Bureau of Labor Statistics. The BLS is the backbone of our economic data infrastructure, offering hyper-specific information on everything from jobs to prices. Not only is it valuable in its own right, it’s also leveraged by private-data providers to build out their feeds.
But budget cuts, leadership changes, and old-school data-gathering techniques mean the data so many people and businesses rely on might not be that reliable for much longer.
That creates challenges for anyone looking to navigate an economy that’s hard enough in the best of circumstances.
Not everyone stands to lose, though.
Back when I was a real reporter and didn’t just ride the coattails of my more-talented colleagues via this newsletter, I wrote a lot about alternative data.
If you’re unfamiliar, alt data is non-traditional information that’s not readily available and often takes some time to sift through. A classic example: Satellite images of a retail chain’s parking lots to gauge foot traffic.
Why is this relevant? Because it shows the outside-the-box ways companies and investors can get economic data. And while it might not be as all-encompassing as what the BLS offers, it’s a start.
But here’s the rub. That data isn’t available to everyone. In fact, plenty of investors pay more money to make sure they’re the only ones that have it.
So as publicly available data becomes tougher to get, a gap could grow between those who can afford to splurge for alternative options and everyone else.
As we examine the future of capitalism, a common complaint about the current system is the widening chasm between the haves and the have nots. The loss of widely available economic data threatens to spread that even more.
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