GDP numbers are out!

GDP for the fourth quarter was revised up to 3.4% from the previous estimate of 3.2%. We also got fourth quarter GDI which came in at a whopping 4.8%.

We won't get final values for either for several years, so one approach is to average the two to get a midpoint estimate (they are supposed to be identical in theory, but measurement error means they differ).

The first estimate comes out the month after the end of the quarter. This is the "advance" estimate. At this stage a lot of the data is missing especially for the final month of the quarter. So the estimate is based on surveys, historical trends, and modelling of the data that is available.

Then there is a second estimate a month later which tends to have more data from the third month and fills in the prior months.

Then there is a third estimate two months later. Most of the data is in by this point.

Then annually there is further refinement based on more precise data and adjustments.

Then every few years, there is a major update to statistical methods and modelling for stuff like inflation and seasonality.

For the most part the major changes are in by the third month or at least within a year. But there are exceptions.

It really just is a matter of a lot of data and a lot of analysis. Computers can only do so much here.

Here's another way to see the economy. This is GDPplus. It tries to adjust for measurement error to get the "true" final value of GDP. Here's what GDP, GDI (gross domestic income), and GDPplus look over the past year.

They've all been positive.