This morning the Bureau of Economic Analysis released a comprehensive revision to the National Income and Product Accounts, covering the full history of data since 1929. The revision showed that the recovery from the Great Recession has been slightly faster than previously reported, with real gross domestic product (GDP) expanding by a cumulative 8.5% from 2009:Q2 to 2013:Q1, compared to the previous estimate of 8.1% growth over that period. Including the advance estimate for 2013:Q2, real GDP has risen by 9.0% since the business-cycle trough in 2009:Q2 (see chart). In addition, real GDP surpassed its pre-recession peak in 2011:Q2, two quarters sooner than was reported prior to the revision, and is 4.4% higher than it was at the business-cycle peak in 2007:Q4.
The revision also showed that while the contraction during the Great Recession was slightly less severe than previously reported, it remains the largest decline since quarterly data became available in 1947. Cumulatively, real GDP fell by 4.3% during the recession, less than the 4.7% drop previously reported. The steep drop in economic activity caused by the recession makes it imperative that more work is done to raise economic growth and speed job creation.
The comprehensive revision to the national accounts, which is the first since July 2009, includes additional source data received by the Bureau of Economic Analysis, as well as methodological changes designed to better reflect the evolving nature of the U.S. economy. For instance, the GDP data released today incorporates input-output tables derived from the once-every-five-years Economic Census, and adopts an expanded definition of business investment that includes spending on research and development (R&D) and the creation of original works of art like movies. All told, these and other changes raised the level of GDP in the first quarter of 2013 by $551 billion at an annual rate (or 3.4%), from $16.0 trillion to $16.5 trillion.
Source: FULL ARTICLE at The White House
