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

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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