Advance GDP Estimate for Q4 Warrants Skepticism

Advance GDP Estimate for Q4 Warrants Skepticism

While reviewing the Bureau of Economic Analysis (BEA) “advance estimate” of Q4 2009 GDP, it seems instructive to revisit the Q3 2009 “advance estimate” which was discussed here exactly three months ago. A quick review suggests that there is little point in treating preliminary reports too seriously due to significant inaccuracies which often result in subsequent revisions. While investors and politicians always fixate on the advance number, few outside the economics profession seem to pay much attention to subsequent revisions. Read this article for a brief discussion on Q4 GDP estimates.

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