Revising the numbers

The federal government’s statisticians are in the process of revising the main measurement of the economy. What is this, and why are they doing it? N.C. State University economist Mike Walden responds.

“It’s GDP, gross domestic product. We’ve talked about this many times on our program. This is the broadest measure of the economy. Think of it as aggregate output in the economy.

And of course what comprises the economy changes over time. We have new products, new technologies, new ways of people earning money. So, what was measured as GDP even 10 years ago is not up to date today.

And so periodically the government and their statisticians and economists have to go through and revise GDP, revise the category, revise what they’re measuring. And that’s really what they’re up to. And they will do that, and they will go back and revise previous numbers.

And so we’re going to get perhaps a whole new look at the economy. Now, I should point out that some people are suspicious of this. Some people when they hear that the government’s going to revise the economic numbers think that it’s done for perhaps non-economic reasons to make the economy look better.

I can assure that is not the case. These revisions are all done by professional economists and statisticians, and people like me rely on these numbers to really know what’s going on in the economy.  So this is really a good thing.”