Friday, August 6, 2010

GDP revision changes everything

I have been forecasting a partial recovery based on BEA reports that consumption had fallen "only" 2-3 percent below trend during first two years of the recession (see this fig).

But the BEA has now significantly revised the national accounts for the past couple of years, and now report that consumption has fallen 3-4 percent below trend during the recession. The revised series is consistent with the view that the labor market will not even partially return to trend!

More to come on the implications of the revised NIPA data.

Major consumption revisions were
Food & nonalcoholic beverages consumed off-premises
Motor vehicle repair
Personal care & clothing services
Household maintenance services
Final consumption expenditures of nonprofits serving households

ADDED: my conclusions were later posted here

1 comment:

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