Once again, there has been a major revision of US statistics, dating back to 1947.
This revision could have been anticipated due to significant changes in data regarding the income and expenditures of Americans. However, this revision extends to all key macroeconomic indicators throughout the history of the United States. The substantial transformation of the data began in 2013, before which only "cosmetic" changes were made.
Impact on GDP and Economic Growth
If we talk about the main indicator - GDP, both nominal GDP and deflator were revised. The discrepancy in nominal GDP amounted to 0.85%, and the deflator exhibited an over 1% deviation (underestimating general inflation). Furthermore, the statistics have been adjusted to 2017 prices, whereas previously comparisons were made using 2012 prices.
Consequently, according to the new data, the cumulative growth of the U.S. economy over a decade was nearly 2% higher than what was previously reported. The most noteworthy change pertains to the 2020 crisis, with the new data indicating a decline of only 2.2%, whereas previously it was believed that GDP had fallen by 3.4%.
In the third quarter of 2023, the US economy is 7.4% above its pre-recession level in the fourth quarter of 2019. During this period, household consumption grew by 10%, driven by an 18.2% increase in demand for goods in real terms and a 6.2% growth in demand for services. Fixed capital investment increased by 6%, while exports only saw a modest 1.2% growth, leading to a significant widening of the trade deficit. Government consumption and investment also experienced a 5% increase.
Trend Growth Analysis
Regarding trend growth:
- US GDP exhibited an average quarterly growth rate of 0.63% from the fourth quarter of 2013 to the fourth quarter of 2019 (6 years). From the fourth quarter of 2019 to the third quarter of 2023, the average quarterly growth rate is 0.48%, and from the fourth quarter of 2021 (start of QE tightening) to the third quarter of 2023, growth stands at 0.44%. In other words, growth is slightly below the pre-crisis trend. The following comparisons will be presented in the same order.
- DMX consumption: 0.67%, 0.65%, 0.49%.
- Gross investment: 0.92%, 0.56%, a decline of 0.23% attributed to stock effects.
- Fixed capital investment: 1.05%, 0.4%, 0.22%.
- Government consumption and investment: 0.49%, 0.33%, 0.59%.
Investment lags significantly behind, but consumer demand remains robust, and government consumption has been accelerating since 2022.
Conclusion
In conclusion, the extensive revision of US economic statistics, encompassing all major macroeconomic indicators dating back to 1947, reveals a significant transformation in our understanding of the nation's economic history. These revisions, initiated in 2013, have brought about notable adjustments in nominal GDP, deflator measurements, and base years for comparisons. Consequently, the newly unveiled data paints a picture of a more resilient economy, with a reduced impact of the 2020 crisis, and a post-recession period characterized by strong consumer demand and a growing role of government consumption.