It’s Christmas in July!

I know that you, like me, are probably excited about the National Income and Product Accounts release of the first Comprehensive Revision since 2004: “1929 Through First Quarter 2009“. Here’s the most interesting part:

“For 1929-2008, the average annual growth rate of real GDP is 3.4 percent, 0.1 percentage point higher than in the previously published estimates.”

That doesn’t sound like much, about as small as a meaningful modification as an economic statistician could possibly make. I didn’t understand how this worked, so I called up the BEA and one of their statisticians helpfully explained that I was coming at the problem backwards. I don’t think I could explain it in a manner that makes sense yet, but the short answer is that compounding the 0.1 percent average increase as if it were interest isn’t applicable here. Which makes sense, because GDP is still being reported around $14.1 trillion rather than $15.4 trillion.

In other news, the economy only contracted by one percent in Q2 2009, while the Q1 Revised figure was downgraded to -6.4 percent from the Final number of -5.5. Calculated Risk points out: “This is the fourth consecutive quarterly decline in GDP; the first time that has happened since the government started keeping quarterly records in 1947.”