Thursday, June 27, 2013
GDP revised extensively
Posted by David Smith at 10:00 AM
Category: Thoughts and responses

The headline news from today's gross domestic product revisions is that the "double-dip" of late 2011 and early 2012 has been revised away. GDP is now thought to have fallen by a tiny 0.1% in Q4 2011 and to have been flat in the first quarter of 2012.

So no double-dip, and some of the other negative quarters since 2009 look likely to be revised away. The snow-affected fourth quarter of 2010, for example, is now down by only 0.2%.

But hopes that the Office for National Statistics would solve some of the puzzles about the economy have been dashed. It now thinks the 2008-9 recession was deeper than it first thought - 7.2% versus 6.4% (that 7.2% is actually a return to an earlier estimate) and that the level of GDP is now 3.9% below pre-crisis levels, rather than 2.6%.

In truth, the big revisions for 2008-13 are probably a few years away, by which time we may get a picture that fits more closely with employment and other economic magnitudes. For now, however, we will have to carry on puzzling. More here.