Tags: GDP | revision | BEA | R&D

FT: Change in Government Statistics Will Boost GDP

By    |   Tuesday, 23 April 2013 07:59 AM

The U.S. economy will grow 3 percent larger in July because the government is tweaking certain statistics that add billions of dollars in intangible assets to the gross domestic product (GDP), according to the Financial Times.

The revisions are aimed at more accurate tracking of changes in U.S. output and include the addition of factors such as spending on research and development (R&D), the impact of creative works such as movies and music and defined pension benefit schemes.

"We are carrying these major changes all the way back in time — which for us means to 1929 — so we are essentially rewriting economic history," Brent Moulton, manager of national accounts at the Bureau of Economic Analysis (BEA), told the Times.

Editor's Note:
 
Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

The intent is to update the GDP measure with more 21st century components and represents the most far-reaching update since computer software was added in 1999, the Times said.

The changes are included in a comprehensive revision of GDP that occurs every five years based on a census of almost 4 million U.S. businesses.

But while the level of GDP may change, the revisions are not expected to alter the overall view of how the economy has fared in recent years.

“I wouldn’t be looking for large changes in trends or cycles,” said Steve Landefeld, BEA director.

The Times said the changes will mean GDP could soar in small states that host a lot of military R&D, such as New Mexico and Maryland, but barely change in others like Louisiana, which could widen measured income gaps among some states.

The inclusion of deficits in defined benefit pension plans could also be notable.

"We will now show a liability for underfunded plans, which particularly has large ramifications for the government sector, where both at the state level and the federal level we have large underfunded plans," said Moulton.

On Friday, the Commerce Department will release its first reading on first-quarter real gross GDP.

The Wall Street Journal concluded that monthly data already available portends a bounce in growth after the weak 0.4 percent annual rate posted in the fourth quarter of 2012.

A median forecast of economists surveyed by Dow Jones Newswires predicts real GDP expanded at a 3.2 percent rate last quarter, the fastest pace since a 4.1 percent jump in 2011’s fourth quarter.

A rival forecast of economists by Bloomberg predicted real GDP grew a slightly smaller 3.1 percent last quarter.

Bloomberg said gains in consumer spending and housing helped fuel the economic acceleration.

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

© 2019 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
Economy
The U.S. economy will grow 3 percent larger in July because the government is tweaking certain statistics that add billions of dollars in intangible assets to the gross domestic product (GDP), according to the Financial Times.
GDP,revision,BEA,R&D
440
2013-59-23
Tuesday, 23 April 2013 07:59 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved