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Type of site
Analyses Government Economic & Unemployment Statistics
Headquarters USA
Owner Walter John Williams
Current status Online is a website that analyzes and offers alternatives to government economic statistics for the United States. Shadowstats primarily focuses on inflation, but also keeps track of the money supply, unemployment and GDP by utilizing methodologies abandoned by previous administrations from the Clinton era to the Great Depression. The website has earned mixed reception based on claims many find implausible.

The site is authored by consulting economist Walter J. Williams, who holds a BA in Economics and an MBA from Dartmouth College.[1] He is popularly known as "John Williams."[1][2]


Shadowstats is perhaps best known for its alternative inflation statistics. Williams says that major changes to the Consumer Price Index were made between 1997-1999 in an effort to reduce Social Security outlays, using controversial changes by Alan Greenspan that include "hedonic regression", or the increased quality of goods.[3] Some other investors have echoed Williams' views, most prominently Bill Gross, who reportedly called the US CPI an "haute con job".[3] John S. Greenlees and Robert B. McClelland, staff economists at the US Bureau of Labor Statistics, wrote a paper to address CPI "misconceptions", such as those of Williams.[4]

Regarding unemployment statistics, Williams points out that under President Lyndon B. Johnson, the U-3 unemployment rate series was created, which excludes people who stopped looking for work for more than a year ago as well as part-time workers who are seeking full-time employment. Although the old unemployment rate series', which include part-time workers looking for full-time work and unemployed who stopped looking over a year ago, is still published monthly by BLS, the U-3 series is generally considered more meaningful and is the headline rate picked up by most media outlets.[5] Williams calculates the U-6 rate as it was calculated until December 1993.

Shadowstats also tracks alternative growth statistics, Williams reports that the official numbers for U.S. Gross Domestic Product (GDP) and jobs growth range from "deceptive"[6] to "rigged" and "manipulated".

On July 24, 2008, Williams testified before the United States House Committee on Financial Services on the "Implications of a Weaker Dollar for Oil Prices and the U.S. Economy."[7]



Economist and former Assistant Secretary of the Treasury for Economic Policy Paul Craig Roberts has cited John Williams' estimates in a review of unemployment rates in 2013.[8] Williams' work has also been cited by author Wayne Allyn Root.[9] Williams has been featured on Fox Business Network and his work has been cited by CNBC.[10][11]


A number of economists and finance experts have claimed that the Shadowstats CPI is conceptually wrong and that their usage leads to easily disproven and absurd conclusions.[4][12][13][14][15]

University of Maryland Professor Katharine Abraham, who previously headed the Bureau of Labor Statistics, the agency responsible for publishing official unemployment and inflation data, says of Williams' claims about data manipulation that "[t]he culture of the Bureau of Labor Statistics is so strong that it's not going to happen." Steve Landefeld, former director of the Bureau of Economic Analysis, the Commerce Department agency that prepares quarterly GDP reports, said in response to an article about Williams, "the bureau rigorously follows guidelines designed to ensure its work remains totally transparent and absolutely unbiased." In the same article, UC San Diego economist Valerie Ramey, a member of the Federal Economic Statistics Advisory Committee, defended the methodological changes, claiming they were only made "after academic economists did decades of research and said they should be done."[2]

Others find these alternatives to be "implausibly high" in spite of potential errors in the official data.[16] Shadowstats measure of inflation has also been unfavorably compared with alternative private measures such as the Billions Prices Project.[17][18] In addition, despite claims of much higher inflation than official reports suggest, and even potential hyperinflation in the future, Shadowstats has not changed its 175$ per year subscription fee since at least 2006, leading some to question its validity.[19][20]

Responding to prior criticisms made by James Hamilton in a private phone call, John Williams explained that Shadowstats does not actually recalculate BLS data, rather, the Shadowstats CPI merely adds a constant to the officially reported numbers.[21]

I’m not going back and recalculating the CPI. All I’m doing is going back to the government’s estimates of what the effect would be and using that as an ad factor to the reported statistics.

See also[edit]


MIT Billion Prices Project

Bureau of Labor Statistics


  1. ^ a b Shadowstats main page: "Walter J. "John" Williams was born in 1949. He received an A.B. in Economics, cum laude, from Dartmouth College in 1971, and was awarded a M.B.A. from Dartmouth's Amos Tuck School of Business Administration in 1972[...]. During his career as a consulting economist...
  2. ^ a b Zuckerman, Sam (25 May 2008). "Economist challenges government data". The San Francisco Chronicle. 
  3. ^ a b "Indeed, over the past few years, some of Mr Williams's views on economic indicators - the consumer price index, in particular - have been echoed by better-known and leading investment community figures, such as the bond investor Bill Gross, the strategist Stephen Roach and James Grant."
    Sikols, Richard (2008-09-20). "Forget short-sellers, Pollyanna creep could be the culprit". The Times Online. The Times. Retrieved 23 November 2009. 
  4. ^ a b John S. Greenlees and Robert B. McClelland: Addressing misconceptions about the Consumer Price Index, Monthly Labor Review, August 2008
  5. ^ Alternative measures of labor underutilization, BLS.
  6. ^ Forsyth, Randall W. (2009-10-30). ""Risk Trade" Returns, at Least for a Day". Barron's. Dow Jones & Company, Inc. Retrieved 23 November 2009. 
  7. ^ House Financial Services Hearing.
  8. ^ Paul Craig Roberts (December 11, 2013). More Misleading Official Employment Statistics . Foreign Policy Journal.
  9. ^ Wayne Allyn Root (2014). The Murder of the Middle Class. Regnery Publishing. ISBN 978-1621572213. 
  10. ^ The Real Unemployment Numbers. Fox Business Network, July 23, 2012.
  11. ^ John Melloy (April 12, 2011). Inflation Actually Near 10% Using Older Measure. CNBC.
  12. ^ Why Shadow Government Statistics is very, very, very wrong, Michael Sankowski, The Traders Crucible, February 1, 2011.
  13. ^ Niall Ferguson Has Not Admitted He Was Wrong About Inflation, Adam Ozimek, Forbes, October 10, 2013
  14. ^ The Absurdity of ShadowStats Inflation Estimates, David Clayton, May 15, 2011.
  15. ^ Hamilton, James (September 4, 2008). "Shadowstats debunked | Econbrowser". Retrieved 2017-04-08. 
  16. ^ Dolan, Ed (March 31, 2015). "Deconstructing ShadowStats. Why is it so Loved by its Followers but Scorned by Economists?". EconoMonitor. Retrieved 2017-03-31. 
  17. ^ O'Brien, Matt (July 17, 2014). "The intellectual cesspool of the inflation truthers". Washington Post. Retrieved 2017-03-31. 
  18. ^ "Social Democracy for the 21st Century: A Realist Alternative to the Modern Left: Sumner versus Schiff and ShadowStats". Social Democracy for the 21st Century. 2013-08-01. Retrieved 2017-03-31. 
  19. ^ Krugman, Paul (August 25, 2012). "Another Alternative Inflation Measure". Paul Krugman Blog. Retrieved 2017-03-31. 
  20. ^ Roche, Cullen (June 5, 2014). "Update: There’s Still Deflation in Hyperinflation Forecasts | Pragmatic Capitalism". Retrieved 2017-03-31. 
  21. ^ Hamilton, James (October 12, 2008). "Shadowstats responds | Econbrowser". Retrieved 2017-03-31. 

External links[edit]