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

More

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.

Jump to comments
Presented by

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

Get Today's Top Stories in Your Inbox (preview)

What Is the Greatest Story Ever Told?

A panel of storytellers share their favorite tales, from the Bible to Charlotte's Web.


Elsewhere on the web

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

The Death of Film

You'll never hear the whirring sound of a projector again.

Video

How to Hunt With Poison Darts

A Borneo hunter explains one of his tribe's oldest customs: the art of the blowpipe

Video

A Delightful, Pixar-Inspired Cartoon

An action figure and his reluctant sidekick trek across a kitchen in search of treasure.

Video

I Am an Undocumented Immigrant

"I look like a typical young American."

Video

Why Did I Study Physics?

Using hand-drawn cartoons to explain an academic passion

Writers

Up
Down

More in Business

Just In