Revision Of Commerce Department Report Will Likely Show Small Increase, Not Decline, Of Fourth Quarter GDP

Monday, February 11, 2013 08:02
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Revision Of Commerce Department Report Will Likely Show Small Increase, Not Decline, Of Fourth Quarter GDP

Tags: deficit | Economic Outlook | economy

The fourth quarter of 2012 saw the hiring of 603,000 workers but no increase in the amount of output.
 
That is one interpretation of the most recent set of data and it is likely to be revised into oblivion as an incorrect reading at a later date.

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A recent Commerce Department report said that gross domestic product (GDP) fell during the fourth quarter and the Labor Department report showed productivity per hour worked fell at a 2% annual rate.
 
Already, a Bloomberg report issued on Friday, February 8, says that trade figures available that day will likely cause the government to revise its GDP figures for fourth quarter 2012 into positive territory.
 
The Commerce Department said the trade deficit narrowed by 21%. That’s the smallest trade gap since January 2010. The reason for the decline was a decline in oil imports.
 
The US imported the smallest number of barrels of oil in 16 years while fuel exports actually increased.
 
The Commerce Department’s Bureau of Economic Analysis issues its report only one month after a quarter’s end, so its estimates can easily be skewed by extrapolations used to fill in for data that is not yet available.
 
The accuracy of the report improves as more data becomes available. Economists now say their tracking estimate of fourth quarter growth is now at .2%. This means the economy didn’t shrink during the fourth quarter; it also shows it didn’t grow much, either.

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