Is the Economy Getting Stronger or Weaker? Yes! No! We Have No Idea!

Here's one thing we know about the economy. It's getting stronger. Just look at the GDP figures. After flailing at 0.4 percent growth in the first three months of this year, we've kicked up to 1.3 percent and 2 percent in the last two quarters. Recovery autumn!

gdp 2011-q3 r1.png

Here's another thing we know about the economy. It's getting weaker. Just look at the GDI figures. That would be "gross domestic income," another measure of the U.S. economy. (GDI is less popular among writers and academics, but in theory, it should provide an equal measure of economic health.) GDI has collapsed over the same three quarters that GDP has expanded. In the last half year, it's expanded at about 0.3 percent. That's zero-point-three, with a zero. That's a payroll tax break away from a recession. (Graph via WSJ)

So what's the deal, is the economy getting better or worse? Yes! No. Probably? We don't really know.

Fourteen trillion dollars is a lot to measure. The Bureau of Economic Analysis does its best. But sometimes, they mess up. Just yesterday, GDP growth for the last quarter was revised from 2.5 percent to down to 2 percent. Over time, GDP and GDI should match up. On a quarter by quarter basis, they can and do differ. The upshot to take from this is twofold: (1) Measuring the economy is a messy science, and (2) if you had to over-under the GDP growth figures, you'd have cause to go under. The recovery still stinks.

Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well. Bestselling author Mark Bittman teaches James Hamblin the recipe that everyone is Googling.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well.

Video

Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.

Video

The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.

Video

Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.

Video

Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in Business

Just In