Monday, March 1, 2010

GDP Revisions

Revisions for the estimates of GDP for the fourth quarter of 2009 came out Friday.

Nominal expenditure, Final Sales of Domestic Product, was revised downward.

The previous estimate was $14,503 billion. That has been reduced to $14,482 billion. That $21 billion decrease is just a tenth of one percent.

Still, the annual rate of increase from the third quarter is now 2.3 percent, which is substantially below the previous estimate of 2.9 percent.

Nominal expenditure remains far below its trend growth path, and well below the adjusted growth path that I think should be targeted. But these figures show that it is getting further behind.

The revised estimate of inflation measured using the GDP implicit price deflator was .4 percent, that is down from the .62 percent estimate. Both are well below the 2 percent trend inflation rate. (And yet above the zero percent I prefer. However, if the CBO estimates of depressed capacity growth are correct, they are a bit below the 1 percent inflation rate consistent with nominal expenditure growing on a 3 percent growth path.)

The real volume of Final Sales of Domestic Product was 1.9 percent. This is down from the previous 2.2 percent estimate.

And, of course, the "good news" was that real GDP grew at a 5.9 percent growth rate rather than 5.7 percent. But nearly 63 percent of that was production of additional inventory--goods and services produced but not sold to anyone.


  1. They were confident enough in their data to make a one tenth of percent change in their estimate?

    They're awfully confident in their data...

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