GDP Flat But Q4 GDI Revised Up To 4.4%

GDP Flat But Q4 GDI Revised Up To 4.4%

GDP Flat But Q4 GDI Revised Up To 4.4%

Moneybox
A blog about business and economics.
March 29 2012 9:28 AM

GDP Flat But Q4 GDI Revised Up To 4.4%

The initial reading on Q4 GDP said output grew at a 2.8 percent annual rate. The first revision pushed that upwards to 3 percent and today's second revision keeps that number steady. But the revised Gross Domestic Income measure is now up at 4.4 percent, which is a substantially better read.

What's the difference between GDP and GDI? Well the answer is that there is no difference. GDP measures the dollar value of everything that was sold whereas GDI measures all the income that was earned by selling things. Conceptually, these numbers have to equal one another. In practice the statistical series don't always add up. The normal pattern is for the statistical discrepency to vanish over time, and the tendency in recent years if for measured GDP to converge on measured GDI. In other words, this is (tentative) evidence that economic growth last winter was stronger than the GDP figure says.