Economic Statistics Give Distorted Picture, Congressional Study Says

WASHINGTON â€”  Many of the nation’s economic statistics are presenting a misleading picture of the economy they are supposed to measure, a congressional study said Sunday.

The study prepared for the Joint Economic Committee found that government statistics-gathering operations had fallen victim to Reagan Administration budget cuts and outdated practices.

“Business leaders and government policy-makers are operating in the dark because of the poor and declining quality of government information gathering,� Sen. Paul S. Sarbanes (D-Md.) said in releasing the study.

The study was prepared by Courtenay Slater, chief economist at the Commerce Department during the Jimmy Carter Administration.

The study found that the Standard Industrial Classification, which the Census Bureau uses to categorize companies, was last updated in 1972. A revision was nearly completed in 1981 but fell victim to budget cuts.

The outdated system means that the fast-growing service sector of the economy is under-represented, with such major enterprises as computer software makers and retail computer stores not even having their own classification categories, the study said.

Another problem, the study said, was serious distortions in the monthly trade statistics because an “archaic processing system� has been overwhelmed by a rising volume of import documents. The first partial introduction of a new computerized processing system is still months away, it said.

The study said that spending at most of the government agencies that produce economic statistics for the 1987 fiscal year will be below the 1980 levels after adjusting for inflation.