Are official GDP growth statistics wrong?

[Jacobtm]

Recent government figures show that the U.S. is not in a recession, and in fact grew at an annualized rate of 1.9% last quarter. I've heard many people assert for various reasons that this data is artificial, inflated for political reasons etc.

So if you have any data showing negative growth in the U.S. economy, or reasons for why the calculations used to determine GDP is flawed, please share them.

[bullmoose88]

Recent government figures show that the U.S. is not in a recession, and is in fact grew at an annualized rate of 1.9% last quarter. I've heard many people assert for various reasons that this data is artificial, inflated for political reasons etc.

So if you have any data showing negative growth in the U.S. economy, or reasons for why the calculations used to determine GDP is flawed, please share them.

I didn't see, but did they say real GDP or just GDP?  I forget the general policy for reporting GDP, one would think they'd adjust for inflation and thus the GDP would be the real GDP, but I wouldn't be surprised if they just reported the nominal figure.

[Fmr. Pres. Duke]

Uh, it wasn't just "made up" for political gain. The only people who would suggest that are far leftists who've been craving a recession for months now.

[Beet]

Growth statistics are often wrong, but they obviously aren't made up for political gain. They do however usually get adjusted more than once. At least three of the quarters since 2000 currently classified as contraction were originally reported as expansion at the time. Since 2000, only one quarter (Q3 2001) was originally reported as contraction.

[Ban my account ffs!]

Well, according to our state statistics, Minnesota is in a recession.  But methinks our numbers are more accurate than the federal ones.

[Jacobtm]

Are people really so 100% sure of the government's flawless methodology and intellectual integrity to put the massaging of figures beyond them?

[Verily]

Recent government figures show that the U.S. is not in a recession, and is in fact grew at an annualized rate of 1.9% last quarter. I've heard many people assert for various reasons that this data is artificial, inflated for political reasons etc.

So if you have any data showing negative growth in the U.S. economy, or reasons for why the calculations used to determine GDP is flawed, please share them.

I didn't see, but did they say real GDP or just GDP?  I forget the general policy for reporting GDP, one would think they'd adjust for inflation and thus the GDP would be the real GDP, but I wouldn't be surprised if they just reported the nominal figure.

I'm pretty sure nominal rather than real GDP is what is used to calculate "official" recessions anyway.

GDP growth is generally overestimated consistently, but it's not a conspiracy. That's just the way it works.

[bullmoose88]

Recent government figures show that the U.S. is not in a recession, and is in fact grew at an annualized rate of 1.9% last quarter. I've heard many people assert for various reasons that this data is artificial, inflated for political reasons etc.

So if you have any data showing negative growth in the U.S. economy, or reasons for why the calculations used to determine GDP is flawed, please share them.

I didn't see, but did they say real GDP or just GDP?  I forget the general policy for reporting GDP, one would think they'd adjust for inflation and thus the GDP would be the real GDP, but I wouldn't be surprised if they just reported the nominal figure.

I'm pretty sure nominal rather than real GDP is what is used to calculate "official" recessions anyway.

GDP growth is generally overestimated consistently, but it's not a conspiracy. That's just the way it works.

That would help to explain why GDP growth is near 2%.

[A18]

The most common standard is two consecutive quarters of negative real GDP growth. When it comes to monitoring the business cycle, nominal GDP is rightly regarded as useless.

[muon2]

The Bureau of Economic Analysis within the Department of Commerce updates the real GDP of previous quarters with each release of new numbers. The most recent release last week showed a significant downward revision of 2007 Q4 from +0.6% to -0.2%. This now shows one quarter of decline in real GDP. A future downward revision for 2008 Q1 from +0.9% could easily set up the two consecutive quarter contraction benchmark for a recession.

In any case contraction in real GDP is not the official measure of a recession. The actual determination is made by the independent National Bureau of Economic Research. They consider a number of factors in addition to real GDP to make a determination that a recession has occurred. Usually they reach that determination on a time scale of about 12 months after the event, so the media focuses on real GDP as a benchmark that can be judged more quickly.

[Queen Mum Inks.LWC]

Uh, it wasn't just "made up" for political gain. The only people who would suggest that are far leftists who've been craving a recession for months now.

What, are you stupid?  Why aren't you helping the cause and FORCING the evidence to fit the media's reports that we're in a recession.  You wouldn't want people to ... find out that we're not in a recession ... do you?

It's sad that we even have this thread titled as it is.  It shows that Liberals REFUSE to accept that we're not in a recession.

[2952-0-0]

Most likely not, but I won't be surprised if the CPI basket is somehow dealt with, making real GDP a lot lower than it is.

Remember the Soviets were so accustomed to giving false data they had to spy on the CIA to see what their spies were estimating about the Soviet economy.

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I guess things are going swell down in Michigan, with Help Wanted signs everywhere and construction sites dotting every block. In fact I hear that GM stock price has soared lately.

[muon2]

I wouldn't be surprised if some months from now we find that there was a recession declared starting late last year and through the early part of this year. I equally would be unsurprised if as we speak the economy had started to right itself. Real GDP was negative in the last quarter of 2007, payroll employment has been negative for the first six months of 2008, and real personal income slowed its growth in the same period from annualized rates of 3-5% to about 1%. I expect second quarter GDP and personal income is going to be up due to the federal stimulus checks.

Since the Great Depression recessions have lasted from 6 to 16 months. The last two have each been 8 months. There's no reason to expect a recession to be outside that range this year.

[War on Want]

Well, according to our state statistics, Minnesota is in a recession.  But methinks our numbers are more accurate than the federal ones.

And Minnesota is one of better off states in the country...

[Queen Mum Inks.LWC]

Most likely not, but I won't be surprised if the CPI basket is somehow dealt with, making real GDP a lot lower than it is.

Remember the Soviets were so accustomed to giving false data they had to spy on the CIA to see what their spies were estimating about the Soviet economy.

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I guess things are going swell down in Michigan, with Help Wanted signs everywhere and construction sites dotting every block. In fact I hear that GM stock price has soared lately.

A one state recession doesn't mean that the whole nation is in a recession.  Buy GM stock now - it's low!!!

[2952-0-0]

A one state recession doesn't mean that the whole nation is in a recession.

Economic confidence isn't exactly swelling right now...what with thousands being thrown from their homes and credit card bills piling up.

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[Queen Mum Inks.LWC]

A one state recession doesn't mean that the whole nation is in a recession.

Economic confidence isn't exactly swelling right now...what with thousands being thrown from their homes and credit card bills piling up.

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Better  hope they're the ones who can find some good ways to use alternative energy!

[Ban my account ffs!]

Sooo.. electric cars powered by coal-based electricity seems to be the way of the future?

From that graph, it looks like more than anything we're going to need to reduce consumption of energy.  Again, conservation and efficiency are priority number one!

[War on Want]

Most likely not, but I won't be surprised if the CPI basket is somehow dealt with, making real GDP a lot lower than it is.

Remember the Soviets were so accustomed to giving false data they had to spy on the CIA to see what their spies were estimating about the Soviet economy.

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I guess things are going swell down in Michigan, with Help Wanted signs everywhere and construction sites dotting every block. In fact I hear that GM stock price has soared lately.

A one state recession doesn't mean that the whole nation is in a recession.  Buy GM stock now - it's low!!!

Because all cars in 10 years will magically be run off of hydrogen-coal bunny fuel!!

[Dan the Roman]

I don't think the statistics are wrong, they are just incomplete. For instance they don't correct for population growth. A big deal is made in conservative media about how "socialist" Europe dosen't grow, but what is not mentioned is that the population in many of these countries is actually falling, so growing by 1.2% when your population is falling is actually increasing per capita GDP.

Ditto for the US. The statistics only show whether the total GDP of the US grows or not, but if it isn't growing at all we're in big trouble because the US population is increasing and at a fairly decent place.

Which is why per capita gdp growth might well be a better measure of economic health.

[Queen Mum Inks.LWC]

Most likely not, but I won't be surprised if the CPI basket is somehow dealt with, making real GDP a lot lower than it is.

Remember the Soviets were so accustomed to giving false data they had to spy on the CIA to see what their spies were estimating about the Soviet economy.

You must be logged in to read this quote.

I guess things are going swell down in Michigan, with Help Wanted signs everywhere and construction sites dotting every block. In fact I hear that GM stock price has soared lately.

A one state recession doesn't mean that the whole nation is in a recession.  Buy GM stock now - it's low!!!

Because all cars in 10 years will magically be run off of hydrogen-coal bunny fuel!!

So, what are you saying, GM will just continue to make gasoline-powered cars, and die out as a company, and Ford and Chrysler will do the same, leaving foreign companies as the only auto providers?

[2952-0-0]

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Not just that. Because oil is going to decline faster than anyone is prepared to make adjustments to (and currently oil is just holding steady even as demand surges, hence the high prices), personal auto sales in general are going to crash all the way until renewable sources become as cheap and plentiful as fossil fuels currently are.

It's too late for an easy transition, since we should have continued what Jimmy Carter started before Asia and Latin America started mass industrialization.

So at this point automakers must either engage in a crash course of fuel efficiency (maybe 100 or 150 mpg will save them, something even Toyota will struggle to pull off) or invest in rail vehicle manufacturing. That's going to be a big growth industry in the coming years.

Don't just look at me. Look at the oil projections.

[War on Want]

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Not just that. Because oil is going to decline faster than anyone is prepared to make adjustments to (and currently oil is just holding steady even as demand surges, hence the high prices), personal auto sales in general are going to crash all the way until renewable sources become as cheap and plentiful as fossil fuels currently are.

It's too late for an easy transition, since we should have continued what Jimmy Carter started before Asia and Latin America started mass industrialization.

So at this point automakers must either engage in a crash course of fuel efficiency (maybe 100 or 150 mpg will save them, something even Toyota will struggle to pull off) or invest in rail vehicle manufacturing. That's going to be a big growth industry in the coming years.

Don't just look at me. Look at the oil projections.

Exactly, almost 100% of car companies will collapse in the near future as big players.

[Jacobtm]

And the final results are in, official GDP growth statistics WERE wrong.

http://news.yahoo.com/s/ap/20081201/ap_on_bi_ge/recession

[Swing low, sweet chariot. Comin' for to carry me home.]

And the final results are in, official GDP growth statistics WERE wrong.

http://news.yahoo.com/s/ap/20081201/ap_on_bi_ge/recession

huh?