Revisions, revisions – REVISIONS!
We get our first revision of our Q1 GDP at 8:30 this morning (was 0.1%, probably lower now), but the big revision has already came last year and, as I predicted at the time, people have already completely forgotten about it.
Last July the Commerce Department decided to include the "knowledge economy" - investments in research and development and entertainment and the arts. Previously, that spending was included as intermediate components during the production of other goods or services, but now they will be measured as fixed assets and reflect their ongoing contributions.
That allowed R&D and, more significantly, entertainment to be counted as fixed assets and boosted the GDP last year by $471Bn or 3%. That's right, we added 3% to our GDP last year (essentially ALL of our "growth" by changing the rules). Another change is how the BEA calculates pension contributions. The agency will now consider compensation to reflect the value of the pension promises made by the employer, rather than the employer’s cash contributions to the pension fund. The new method better reflects the retirement benefits a worker earns, BEA said. As a result, the personal savings rate averaged 4.7%, an upward revision of one percentage point, for the period between 2002 and 2012.
Seriously, can not one single reporter in the media remember that we diddled with our own GDP not even 12 months ago? Did you remember? "Gosh honey, look how quickly our children have grown – now that we're measuring them in centimeters!"
In fact, aren't we legalizing marijuana and moving that onto the economic books going forward? Let he who is without spin cast the first stone, right? Of course we're all ameteurs compared to Japan, who are actively pushing women into…
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This entry was posted on Thursday, May 29th, 2014 at 8:30 am and is filed under Uncategorized. You can leave a response, or trackback from your own site.
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