|
By Michael Owyang, Research Officer and Economist
Gross domestic product (GDP) is a quarterly economic indicator that reflects the amount of output produced in a country. In the U.S., the Bureau of Economic Analysis (BEA) releases two estimates of quarterly GDP, known as the advance and preliminary estimates, in the two months before the release of the final number:
In a recent Economic Synopses essay, we examined the pattern of revisions for payroll employment data. We found that the sign of the revision to payroll employment, released by the Bureau of Labor Statistics is more likely to be positive (revised up) during expansions and more likely to be negative (revised down) during recessions. We argued that this created a conundrum for policymakers who rely on the just-in-time release of the economic indicators to enact appropriate policies.
We wondered whether the same asymmetry occurred for the GDP releases—that is, whether there was a systematic difference between the final number and, say, the preliminary release. The figure below shows the difference between the final release and the preliminary release, with recessions shaded in gray.
While there are no obvious patterns, there are typically large negative revisions from the preliminary releases to the final releases at the beginning of recessions.
What accounts for the differences between the preliminary and final estimates of GDP? The differences may lie in the period over which they are measuring or in the methods used for their collection.
The St. Louis Fed uses Disqus software for the comment functionality on this blog. You can read the Disqus privacy policy. Disqus uses cookies and third party cookies. To learn more about these cookies and how to disable them, please see this article.
Subscribe to
On the Economy
Get notified when new content is available on our On the Economy blog.
The On the Economy blog recently ranked in the top 20 on Feedspot’s list of top bank blogs.
About the Blog
The St. Louis Fed On the Economy blog features relevant commentary, analysis, research and data from our economists and other St. Louis Fed experts.
Views expressed are not necessarily those of the Federal Reserve Bank of St. Louis or of the Federal Reserve System.
Popular Posts
Contact Us
For media-related questions, email mediainquiries@stls.frb.org. For all other blog-related questions or comments, email on-the-economy@stls.frb.org.
Categories
- Vulgar, obscene, profane or otherwise disrespectful or discourteous
- For commercial use, including spam
- Threatening, harassing or constituting personal attacks
- Violating copyright or otherwise infringing on third-party rights
- Off-topic or significantly political
The St. Louis Fed will only respond to comments if we are clarifying a point. Comments are limited to 1,500 characters, so please edit your thinking before posting. While you will retain all of your ownership rights in any comment you submit, posting comments means you grant the St. Louis Fed the royalty-free right, in perpetuity, to use, reproduce, distribute, alter and/or display them, and the St. Louis Fed will be free to use any ideas, concepts, artwork, inventions, developments, suggestions or techniques embodied in your comments for any purpose whatsoever, with or without attribution, and without compensation to you. You will also waive all moral rights you may have in any comment you submit.