Boom Doom Economy: USA GDP Revisions Reveal Slower Economic Recovery (GDP Charts) *Great Recession worse than reported*

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Bureau of Economic Analysis: Revision of the National Income and Product Accounts

Official Statement by the Bureau of Economic Analysis is lower in this post.

BEA Revisions Reveal Slower Recovery The Bureau of Economic Analysis GDP revisions from Q3 2009 through Q1 2011 reveal a slower recovery than originally reported. The USA Real GDP % by Quarter, on the chart below, are:
Quarter, Original, Revised
Q3 2009: +1.6%, +1.7%
Q4 2009: +5.0%, +3.8%
Q1 2010: +3.7%, +3.9%
Q2 2010: +1.7%, +3.8%
Q3 2010: +2.6%, +2.5%
Q4 2010: +3.1%, +2.3%
Q1 2011: +1.9%, +0.4%
Recovery Average (7 quarters): +2.80%, +2.63%

BEA Revisions Reveal Worse Recession The Bureau of Economic Analysis GDP revisions from Q3 2008 through Q2 2009 (the Great Recession) reveal a worse recession than originally reported. The plunge in GDP was deeper. The USA Real GDP % by Quarter, on the chart below, are:
Quarter, Original, Revised
Q3 2008: -4.0%, -3.7%
Q4 2008: -6.8%, -8.9%
Q1 2009: -4.9%, -6.7%
Q2 2009: -0.7%, -0.7%

Great Recession Average (4 quarters): -4.10%, -5.00%

USA Real GDP % by Quarter (Chart) The chart below is the annualized percentage change of the Real GDP (seasonally adjusted at annual rate) from the preceding quarter (QoQ), from Q1 2008 through Q2 2011. The original Bureau of Economic Analysis GDP data is in blue. The revised Bureau of Economic Analysis GDP data is in red. An initial negative drop occurred in Q1 2008, but was followed by a positive bounce in Q2 2008. A negative drop into the Great Recession began Q3 2008 at the time of the USA Financial Crisis, followed by a steep decline, and bottom, in Q4 2008. The deepness of the Great Recession continued in Q1 2009. The Great Recession continued for 4 quarters until Q2 2009. Positive GDP growth resumed in Q3 2009, the rebound peaking in late 2009 and early 2010. The Q1 2010 GDP of +3.9% is now the recent recovery peak.

USA Real GDP % by Year (Chart) The chart below is the annual percentage change of the Real GDP (seasonally adjusted at annual rate) from the preceding year (YoY), from 2004 through 2010. The original Bureau of Economic Analysis GDP data is in blue. The revised Bureau of Economic Analysis GDP data is in red. USA GDP peaked in 2004 at +3.5%, the highest since 2000 (+4.1%). GDP decreased 5 consecutive years. The Great Recession is evident beginning in 2008 at -0.3% and 2009 at -3.5%. 2010 GDP recovered to +3.0%, a 5-year high (2005 = +3.1%). The USA Real GDP % by Year, on the chart below, are:

Year, Original, Revised
2004: +3.6%, +3.5%
2005: +3.1%, 3.1%
2006: +2.7%, +2.7%
2007: +1.9%, +1.9%
2008: 0.00%, -0.3%
2009: -2.6%, -3.5%
2010: +2.9%, 3.0%
Average (latest 3 years): +0.10%, -0.27%
Average (7 years): +1.66%, +1.49%

Commentary The revisions by the Bureau of Economic Analysis changed the USA economic story somewhat from the beginning of the Great Recession through the current recovery. The Great Recession was more severe and created more economic damage. The Recovery has been slower and almost stalled in Q1 2011. The quarterly recovery peaks in Q4 2009 and Q4 2010 were not as strong and revised downwards. The recovery, that began in Q3 2009, was not enough for a neutral GDP for all of 2009 (0.00%), as originally reported, but actually decreased slightly (-0.3%).

The Bureau of Economic Analysis: Revision of the National Income and Product Accounts

(July 29, 2011)

The revised estimates reflect the results of the annual revision of the national income and product accounts (NIPAs). In addition to the regular revision of estimates for the most recent 3 years and the first quarter of 2011, this “flexible” annual revision results in revisions to current-dollar GDP and some components back to the first quarter of 2003. The reference year remains 2005. In cases for which the estimates for the reference year (2005) are revised, this results in revisions to the levels of the related index numbers and chained-dollar estimates for the entire historical period; revisions to percent changes before the first quarter of 2003 are small..

Annual revisions, usually made each July, incorporate newly available and more comprehensive source data, as well as improved estimating methodologies. In this annual revision, the notable revisions primarily reflect the incorporation of newly available and revised source data. For example, the revised estimates of profits reflect newly available Internal Revenue Service tabulations of tax returns for corporations for 2009 and revised tabulations for 2008.

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