On Sunday, I mentioned the Association of American Railroads “Rail Time Indicators.” It was not showing any green shoots.

That post, plus yesterday’s rant on the NAR (More NAR Nonsense), led to Doug Smith, Executive Director of The Sulzberger Leadership Program at Columbia School of Journalism, asking the following question: “Which of these associations are credible versus those that are NAR-like?”

The best way to determine that is to look at the data they release, juxtaposed against any quotes from their spokesman/economist. Are they spinning, sugarcoating or otherwise “prettying up” the news release? Once you get through that review, take a closer look at their disclosed methodologies. Are they defendable approaches that produce negative as well s positive outcomes? Or are they biased, and unlikely to ever say a bad word about their respective industry or economic sectors?

My favorite example of worthless data comes from the NAR — specifically, their Housing Affordability Index.  During the entire housing boom and credit bubble, they NAR HAI showed only one single month when houses were considered “less than affordable.” That is simply a pathetic joke making that index worthless.

Other trade groups seem less biased and more reliable.  The AAR seems like a legitimate group. As another example, let’s also take a look at the American Trucking Associations’ data. Specifically, the monthly advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index, released late yesterday afternoon. Following May’s 3.2% jump (seasonally adjusted of course) it fell 2.4% in June. This dropped the index to 99.8 (2000=100). The change in tonnage hauled by fleets before any seasonal adjustment was up 5.2% in June from May. Compare this with June 2008, when tonnage fell 13.6%. So far, the June 08 contraction was the largest year-over-year decrease of the current cycle, exceeding the 13.2 percent drop in April.

Now consider the “no-spin” statement from the ATA’s Chief Economist, Bob Costello that accompanied this data release:

“While I am hopeful that the worst is behind us, I just don’t see anything on the economic horizon that suggests freight tonnage is about to rise significantly or consistently. The consumer is still facing too many headwinds, including employment losses, tight credit, and falling home values, to name a few, that will make it very difficult for household spending to jump in the near term. As a result, this is likely to be the first time in memory that truck tonnage doesn’t lead the macro economy out of a recession. Today, many new product orders can be fulfilled with current inventories, not new production, thus suppressing truck tonnage.”

That seems to me to be straight talk — no spin, no wishful thinking — just the straight shit. You gotta respect any economist who doesn’t mince words and simply gives you his views, straight up, no chaser.

What are the better industry trade groups? Which non government, non-academic associations produce reliable, spin free data?


chart via ATA


NAR Housing Affordability Index is Worthless (August 13th, 2008)


ATA Truck Tonnage Index Fell 2.4 Percent in June


See also:
Tracking NAR Spin (April 23rd, 2008)


Worst. Forecasters. Ever?
The cockeyed optimists of the National Association of Realtors.
Daniel Gross
Slate, Monday, Dec. 10, 2007


NAR and Housing Forecasts (June 7th, 2007)


Category: Economy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

17 Responses to “Which Are the Credible Industry Trade Groups?”

  1. investorinpa says:

    You know, I ‘m not sure which groups are the best at giving the real data, but item today I read and linked up shows why exactly the banks aren’t doing loan mods…they are making more moeny going the foreclosure route than by doing the loan mods. They are putting defaulting borrowers into 1 of 3 categories, only one of which they feel gets a chance to do a loan mod. As per usual, the trade groups interpret their data in the article..should make for a good add on to today’s linkfest: http://contraryriches.blogspot.com/2009/07/banks-making-more-from-foreclosures.html

  2. investorinpa says:

    Just speaking from personal experience, having owned a car wash business for several years, the car wash association put out accurate data and took both annual and semi annual surveys to see how business was, how much water was being used, what products were selling well/not selling well.

    Another group whose data I have looked at before is the international association of plastics distribution…they seem to have good hard data on what’s being bought/sold.

  3. hue says:

    doesn’t it have to do with sales? ARA and ATA less sales then realtors, always a good time to buy a house.
    What would a Wall Street trade group economist sound like? economy is fine. all in everybody, the market is leaving without you.

  4. srvbeach21 says:

    I think the International Swaps and Derivatives Association is pretty unbiased.

    Just kidding.

  5. Transor Z says:

    Technically, the Federal Reserve is non-government, non academic. Some of their data/analysis is excellent, but you do need to go in with your eyes open. The study that backed Kohn’s most recent defense of Fed independence was not really on point if you bothered to read the footnote. I also had some problems with the methodology of the recent Fed paper on the effectiveness of mortgage renegotiation.

    But I have to begrudgingly give credit where credit is due otherwise.

  6. willid3 says:

    well i would add NASSCOM and ITAA as groups that aren’t credible

  7. Ramstone says:

    Most anything the Dallas Fed publishes.

  8. advsys says:

    Not totally on point but close enough to talk about one of my big beefs. What is up with CEO’s talking about the state of the Economy???? Yes, they might have a window into how their industry is doing, but for crying out loud when did these guys become full scale economists and soothsayers?

    A drug company CEO can tell us a little about what they are seeing downstream in their channels but this knowledge probably does not even tell us much about the managed health care sector much less what might be happening in home electronics!

    Their opinions about the state of the economy just can not have any more validity than anything I might think. For examples just listen to CNBC.

  9. retrogrouch says:

    I find myself asking what spin would accomplish for the trade group. The NAR spin passing through the echo chamber has the potential to affect consumer readiness to buy their product/services. The for hire truckers tonnage folks aren’t going to generate more consumer demand by spinning their stats. “Hey it’s a really good time to ship goods to that store that’s not selling stuff”? It doesn’t work. I can imagine some temptation to spin to pump up rates slightly – but the trucking arena has too much competition to get away with it. Similarly the Baltic Dry Index seems reliable. I think the question becomes one of incentives to spin. And then of course when you think about the NAR how shameless that spin can become.

  10. [...] sign yet of a turn in trucking tonnage.  (Big Picture, The Pragmatic Capitalist, Research [...]

  11. For data? I’m guessing entertainment. For advocacy? Not so much

  12. For data? I’m guessing entertainment. For advocacy? Not so much

    I hope this didn’t go through. Another one that I recall in the deep recesses of my mind that tend to be quite accurate are advertising trade groups. They also tend to lead

  13. Transor Z says:

    Makes me wish there were review boards to endorse/rate/set standards for the collection and analysis of data. Conduct periodic audits of data collection and quality controls over databases.

    As it is it’s caveat lector out there.

  14. And another

    Business Travel News: The Air Transport Association reported June passenger revenue for the largest
    U.S. airlines fell 26 percent, compared with June 2008—marking the eighth consecutive month of yearover-year declines. That the number of passengers is down only 6.5 percent indicates the absence of highyielding business passengers.


  15. I assume the dog teeth whitening industry would show a good correlation with hard times. I don’t know the name of their trade group either :mrgreen: