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Mon December 23, 2013
Nobody Knows Exactly How Fast The Economy Is Growing
Originally published on Mon December 23, 2013 1:17 pm
The economy grew really quickly this summer. At least, that's the government's best guess for now.
The BEA said Friday that GDP rose at an annual rate of 4.1 percent between July and September. That's the highest it has been in years. But in its previous estimate for summer growth, the government said the economy was growing at an annual rate of 2.8 percent.
Friday's number is almost certainly closer to the truth than the earlier number, because early GDP estimates come in before the government has all the relevant data.
On top of regular revisions like Friday's, there are massive, periodic overhauls in how the government counts GDP. Just this year, for example, the government changed the way it calculates research spending in the economy — and went back and revised GDP data going all the way back to 1929.
The U.S. economy is this giant, complicated thing, and we'll never know exactly how fast it's growing (or shrinking). GDP will always just be the government best guess.