Wednesday, December 23, 2009

Q3 US growth rate revised downwards again, to 2.2%

Statistics is not by its nature a natural science, it tries to account with socio-economic behavior, at least in the case of Gross Domestic Product and related statistics (some economists, eg Stiglitz, even question the utility of GDP/GNP as a prosperity measure/index). Thus the statistics agencies that collect, calculate and publish GDP and related economic and social data (eg ONS in the UK, Eurostat in the EU, the agencies under the Dept of Commerce in the US, the Economics and Statistics Administration, and specifically the "Bureau of Economic Analysis" etc) usually do it in 3 steps: initial, advance or flash, plus 2 revisions.

It was only yesterday that the UK's ONS published its second revision of Q3 UK GDP. Initially estimated at -0.4% compared to Q2, then it was revised to -0.3% and yesterday to -0.2%, ie upwards.

Today, the Bureau of Economic Analysis published the second revision of the US Q3 GDP compared to Q2. From the initial 3.5%, and after a first revision down to 2.8%, this revision brings the Q3 GDP growth to 2.2%!

The press release states: "Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.2 percent in the third quarter of 2009, (that is, from the second quarter to the third quarter), according to the "third" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP decreased 0.7 percent."

It goes on to say that the "GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was 2.8 percent (see "Revisions" on page 3)"

Note that Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise specified. Quarter-to-quarter dollar changes are differences between these published estimates. Percent changes are calculated from unrounded data and are annualized. “Real” estimates are in chained (2005) dollars. Price indexes are chain-type measures.

Real exports of goods and services increased 17.8% in the third quarter, in contrast to a
decrease of 4.1% in the second. Real imports of goods and services increased 21.3%, in contrast to a decrease of 14.7% in Q2.

Gross domestic purchases: Real gross domestic purchases - purchases by U.S. residents of goods and services wherever produced - increased 3.0% in the third quarter, in contrast to a decrease of 2.3% in the second.

Gross national product: Real gross national product -- the goods and services produced by the labor and property supplied by U.S. residents -- increased 3.0% in the third quarter, in contrast to a decrease of 1.0% in the second.
GNP includes, and GDP excludes, net receipts of income from the rest of the world, which increased $25.7 billion in the third quarter after decreasing $7.4 billion in the second; in
the third quarter, receipts increased $15.7 billion, and payments decreased $10.0 billion.

The "third" estimate of the third-quarter increase in real GDP is 0.6 percentage point, or $17.3 billion, lower than the second estimate issued last month, primarily reflecting downward revisions to nonresidential fixed investment, to private inventory investment, and to personal consumption expenditures.

Advance Estimate to Second Estimate to Third Estimate (Percent change from preceding quarter)

Real GDP....................................................... 3.5 2.8 2.2
Current-dollar GDP..................................... 4.3 3.3 2.6
Gross domestic purchases price index...... 1.6 1.4 1.3

Note that the next release is scheduled for January 29, 2010, at 8:30 A.M. EST for:
Gross Domestic Product: Fourth Quarter 2009 (the "Advance Estimate") and that release dates in 2010 are:

Gross Domestic Product

2009: Q4 and 2009 annual 2010: I 2010: II 2010: III

Advance…… January 29 April 30 July 30 October 29
Second…….. February 26 May 27 August 27 November 23
Third………. March 26 June 25 September 30 December 22

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