That Pesky, Weak First Quarter GDP Number
There is likely a negative bias that exists in the seasonally adjusted US GDP numbers of the first quarter of every year, and this has been going on for who knows how long. Hypothetically, this does get made up for in subsequent quarters (particularly the very next quarter - Q2 - (For example, take a look at Q2 GDP during 2008.. smack inside of the Great Recession.. and yet, decidedly positive!?)).
Well, leave it to the bean counters over at the BEA to fix it all. They are gearing up to release revised data going back to 2012. Never mind adjusting the entire series, which is arguably what they should do, if and when resetting how they account for this or that. Nope, they are merely going to tidy up those pesky, weak numbers going back to 2012, the extent of the current benchmark revision.
This is a real-life example why those in the know pay less and less attention to seasonally adjusted GDP reports, and more and more attention to things like The Big Four Recession Indicators (which, as has been shared here recently, are advertising that a dramatic economic slowdown is indeed underway, despite whatever these upcoming 'adjustments' may otherwise suggest). And when looking at GDP, many of the best econs are now placing far more weight on GDI (Gross Domestic Income). Also helpful is looking at NOT-seasonally-adjusted GDP comparisons, as well as Nominal GDP. Less data manipulation, less guesswork = often enough, more reliable inferences.
~Related Articles~
CNBC
Govt sees GDP data problems, backs CNBC findings
The government agency charged with calculating the nation's growth rate is acknowledging problems with its numbers and pledging a series of fixes over the next several months.
In a statement to CNBC, the Bureau of Economic Analysis said it's "aware of issues" in it gross domestic product data and "is developing methods to address what it has found."
The BEA statement comes after CNBC, in a detailed report in April, showed that first-quarter GDP data have been weaker than the other three quarters for the past 30 years and substantially weaker in the past five...
Zero Hedge
The US Department Of Commerce Officially Jumps The Shark, Will "Double Seasonally Adjust" GDP Data
...In other words, as of July 30, the Q1 GDP which will have seen its final print at -1% or worse, will be revised to roughly +1.8%, just to give the Fed the "credibility" to proceed with a September rate hike...
Will abnormally "good" data be revised lower...? Don't hold your breath...
Well, leave it to the bean counters over at the BEA to fix it all. They are gearing up to release revised data going back to 2012. Never mind adjusting the entire series, which is arguably what they should do, if and when resetting how they account for this or that. Nope, they are merely going to tidy up those pesky, weak numbers going back to 2012, the extent of the current benchmark revision.
This is a real-life example why those in the know pay less and less attention to seasonally adjusted GDP reports, and more and more attention to things like The Big Four Recession Indicators (which, as has been shared here recently, are advertising that a dramatic economic slowdown is indeed underway, despite whatever these upcoming 'adjustments' may otherwise suggest). And when looking at GDP, many of the best econs are now placing far more weight on GDI (Gross Domestic Income). Also helpful is looking at NOT-seasonally-adjusted GDP comparisons, as well as Nominal GDP. Less data manipulation, less guesswork = often enough, more reliable inferences.
~Related Articles~
CNBC
Govt sees GDP data problems, backs CNBC findings
The government agency charged with calculating the nation's growth rate is acknowledging problems with its numbers and pledging a series of fixes over the next several months.
In a statement to CNBC, the Bureau of Economic Analysis said it's "aware of issues" in it gross domestic product data and "is developing methods to address what it has found."
The BEA statement comes after CNBC, in a detailed report in April, showed that first-quarter GDP data have been weaker than the other three quarters for the past 30 years and substantially weaker in the past five...
Zero Hedge
The US Department Of Commerce Officially Jumps The Shark, Will "Double Seasonally Adjust" GDP Data
...In other words, as of July 30, the Q1 GDP which will have seen its final print at -1% or worse, will be revised to roughly +1.8%, just to give the Fed the "credibility" to proceed with a September rate hike...
Will abnormally "good" data be revised lower...? Don't hold your breath...