As foreseen in my previous post, the overall result of the comprehensive revision of real GDP growth rate is positive, with the annual average correction of +0.07% between 1995 and 2008. Figure 1 presents the difference between annual growth rates before (retrieved from the BLS web site at 6:00 31.07.2009) and after (retrieved from the BLS web site at 8:35 31.07.2009) the comprehensive revision. Negative differences correspond to higher rates after the revision. At first glance, the largest positive correction is related to the years between 1998 and 2003, i.e. during the period which includes previous “recession”. The new readings just confirm our old conclusion on the absence of any recession in 2001. In any case, a +1% increase in real GDP is not a recession. Figure 2 presents quarterly readings of (annualized) growth rate after the comprehensive revision. This Figure also denies any recession in 2001, as defined by two subsequent quarters with negative growth.
At the same time, despite the annual growth in real GDP in 2008 was positive (revised by 0.6% down, there were two consecutive quarters of negative growth. So, we likely observed a recession in 2008. However, it is too early to make a firm conclusion about the recession in 2009. One might fail as in 2001. Even the Q2 advance estimate of -0.8% is not the final reading. Figure 3 shows that the most recent estimates of real GDP growth are prone to the highest revisions. So, the past of real GDP is not well predicted.
At the same time, despite the annual growth in real GDP in 2008 was positive (revised by 0.6% down, there were two consecutive quarters of negative growth. So, we likely observed a recession in 2008. However, it is too early to make a firm conclusion about the recession in 2009. One might fail as in 2001. Even the Q2 advance estimate of -0.8% is not the final reading. Figure 3 shows that the most recent estimates of real GDP growth are prone to the highest revisions. So, the past of real GDP is not well predicted.
Figure 1. The difference between annual growth rates of real GDP before (retrieved from the BLS web site at 6:00 31.07.2009) and after (retrieved from the BLS web site at 8:35 31.07.2009) the comprehensive revision. Negative differences correspond to higher growth rates after the revision.
Figure 2. Quarterly (annualized) growth rates of real GDP in the USA after the comprehensive revision.
Figure 3. The difference between quarterly (annualized) growth rates of real GDP in the USA before and after the comprehensive revision
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