Tag: "GDP"

Lies, Damed Lies, and GDP

Back in the day, I was being only partly facetious when I suggested that the government stop compiling foreign trade statistics. Once you know the numbers, some countries will have trade surpluses while others have deficits. Left alone and unobserved, those imbalances would resolve themselves one way or another, and their automatic resolutions would almost […]

Sandy and GDP

Natural disasters, like Hurricane Sandy, provide periodic reminders, not of the shortcomings of GDP necessarily, but what GDP is designed to measure and what it is not designed to measure. The definition of GNP I think I recall from my college days is that it is the total dollar value of all goods and services […]

First Quarter’s 2.2% GDP Stronger than Fourth Quarter’s 3.0%

This morning’s initial first quarter real GDP increase at a 2.2 percent annual rate was stronger than the fourth quarter’s 3.0 percent after adjustment for volatile inventory fluctuations. An inventory buildup accounted for two-thirds of the fourth quarter increase. Real Final Sales—GDP minus inventories—grew only 1.1 percent in the first quarter versus 1.6 percent in […]

Fourth Quarter GDP–Not as Good as It Sounds

Unlike Wagner’s music, the fourth quarter GDP numbers are not better than they sound. They are worse, in fact, and the third and final estimate, out last week, didn’t improve them any. The second and third estimates both had real GDP growing at an annual rate of 3 percent in the fourth quarter, the largest […]

Third Quarter Real GDP

(Not All Details are Bad) The front page of today’s Wall Street Journal features a useful breakdown of the third quarter real GDP statistics. On the negative side, it shows that the strength in consumption spending benefited from various temporary government programs: primarily cash for clunkers and the first time home buyers’ credit. Those will […]

The New GDP Numbers, Another Look

Gross Domestic Product (GDP) and real GDP are generated by total U.S. spending on final goods and services. The U.S. national income accounts use the spending categories of Consumption (C) plus Investment (I) plus Government spending (G) plus Exports minus Imports (X-M). GDP = C + I +G + X – M. (These categories roughly correspond to […]

Gross Domestic Product New II-Q Numbers

Some Reminders from Econ 101: GDP is an estimate of the total value of all final goods and services produced during a year (or in a quarter expressed at an annual rate). It's the broadest most comprehensive estimate of the value of the total output (and income) produced in the economy. Estimate. Yes, it's an […]

GDP versus Standard of Living

In my opinion, the average watcher of financial cable TV and reader of the financial press can be forgiven some confusion. Experts are found at opposite extremes of many issues. For example, *We need more spending, but budget deficits are bad. *Debt is bad, but we are adding debt at a record pace. *Consumers and […]

U.S. Foreign Trade

The Good, the Bad, and the Ugly   The Good:  The Trade Deficit is shrinking. The Bad:    Trade is shrinking. The Ugly:   Protectionism is growing. The deficit in U.S. trade in goods and services shrank to $26 billion in February, from a revised $36.2 billion in January. This is good news. On the other hand, […]

Fourth Quarter Real GDP on a Slippery Slope

Real GDP declined at an annual rate of 3.8 percent in the 4th quarter. However, that includes additional inventory "investment" worth 1.32 percentage points. Excluding inventory changes, "real final sales" declined at an annual rate of 5.1 percent, the more meaningful number since the inventory building was likely involuntary and doesn't auger well for the […]