Analysts must be cautious with economic data because it often has time lags, revisions, changing definitions, and rebasing issues, all of which can distort analysis and forecasts:
Timeliness: Data may be released with significant delays (e.g., over a quarter or even two years for some developing countries), making it less useful for assessing current conditions.
Revisions: Initial data often undergo revisions—sometimes substantial—that can alter previous interpretations. These include routine updates or major benchmark revisions.
Changing Definitions: The methods used to calculate economic indicators can change over time. For example, the U.S. CPI changed in 1983 and 1991, affecting comparability over time.
Index Re-basing: Indexes like CPI are sometimes re-based to a new period, making historical comparisons tricky if data from different base years are mixed.
These limitations mean that analysts must understand the nature of the data—including how and when it was constructed—and be careful not to draw misleading conclusions based on revised or outdated information.