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GDP - OK, so where are we?

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December 08, 2009 – Comments (0)

Journalists and reporters often do not report news and facts very accurately, and their recent coverage of the GDP is no exception. GDP did NOT increase 2.4%: this was a calculated "annualized" rate; in fact, it went up 0.7% during Q3. So: 4 x 0.7% = 2.4%. I wonder how many reporters understand this.

There are any number of ways to shake 'n bake the data.
This is the raw data:
2007q1           0.3%
2007q2           0.8%
2007q3           0.9%
2007q4           0.5%
2008q1           -0.2%
2008q2           0.4%
2008q3           -0.7%
2008q4           -1.4%
2009q1           -1.6%
2009q2           -0.2%
2009q3           0.7%

So, here are different ways to report the same data: MRQ   2.8%

TTM    -2.5%

annual rate:

2007   2.5%
2008   -1.9%
2009   -1.1%

I suggest that Fools disregard media reports about GDP, and bookmark this page:

www.bea.gov

 

 

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