The second quarter is in the spotlight Friday, but there’s an interesting sideshow, too: revised gross domestic product numbers for 2009, 2010 and 2011.
The annual update of older numbers shows that 2009 was a little better, and 2010 a little worse, than the government estimated when it crunched the numbers last summer.
But the latest revisions also underscore that on the whole the recession was much worse, and the recovery much slower, than we understood at the time. The chart below compares the first estimate of quarterly growth, released by the Bureau of Economic Analysis one month after the end of each quarter, with the latest figures published Friday. (The numbers for 2008 were not revised Friday; the comparisons for that year are between the original estimates and the bureau’s most recent revisions, which were published last summer.)
Source: Bureau of Economic Analysis The pattern is obvious, but it’s worth underscoring the magnitude: The changes have erased more than $800 billion from the three-year period, roughly the annual economic output of the Netherlands.
As I wrote last summer, the early estimates have never been particularly reliable. They are concocted from comprehensive data, samples and educated guesswork, and then gradually refined.
But the march toward accuracy is painfully slow. The chart below shows the difference, in percentage points, between the new quarterly estimates and the bureau’s prior estimate. For 2009, 2010 and the first quarter of 2011, that’s the annual revision published last summer. For the more recent quarters, it’s the estimate published four months after the end of the quarter.
As the chart shows, it’s not just more recent quarters that are still jumping around. Some of the largest changes date back to 2009, for the mundane reason that the bureau has only recently received comprehensive information on spending by state and local governments, and it turns out that the bureau’s earlier estimates were much too low.
There are similar explanations for all the changes, but the bottom line is that we tend to overestimate how much we know about the health of the economy, or about its recent history.
http://economix.blogs.nytimes.com/2012/07/27/new-figures-put-recession-and-recovery-in-focus/
The annual update of older numbers shows that 2009 was a little better, and 2010 a little worse, than the government estimated when it crunched the numbers last summer.
But the latest revisions also underscore that on the whole the recession was much worse, and the recovery much slower, than we understood at the time. The chart below compares the first estimate of quarterly growth, released by the Bureau of Economic Analysis one month after the end of each quarter, with the latest figures published Friday. (The numbers for 2008 were not revised Friday; the comparisons for that year are between the original estimates and the bureau’s most recent revisions, which were published last summer.)
Source: Bureau of Economic Analysis As I wrote last summer, the early estimates have never been particularly reliable. They are concocted from comprehensive data, samples and educated guesswork, and then gradually refined.
But the march toward accuracy is painfully slow. The chart below shows the difference, in percentage points, between the new quarterly estimates and the bureau’s prior estimate. For 2009, 2010 and the first quarter of 2011, that’s the annual revision published last summer. For the more recent quarters, it’s the estimate published four months after the end of the quarter.
Source: Bureau of Economic Analysis
As the chart shows, it’s not just more recent quarters that are still jumping around. Some of the largest changes date back to 2009, for the mundane reason that the bureau has only recently received comprehensive information on spending by state and local governments, and it turns out that the bureau’s earlier estimates were much too low.
There are similar explanations for all the changes, but the bottom line is that we tend to overestimate how much we know about the health of the economy, or about its recent history.
http://economix.blogs.nytimes.com/2012/07/27/new-figures-put-recession-and-recovery-in-focus/
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