In a recent article on the major adjustments that are being planned for the soon to be released U.S. Commerce Department’s analysis on how the U.S. economy is measured, Jack Kleinhenz, chief economist of the National Retail Federation, notes that major adjustments will be incorporated into the calculation of U.S. gross domestic product beginning with the release scheduled for July 31, 2013.
Kleinhenz writes that the GDP revisions will include some major changes that will increase the amount of final goods and services shown as produced in the economy. “Yes, economic output will be about 3% higher than we thought it was,” he notes, “But it doesn’t necessarily mean the economy is growing any faster or slower. It simply means the government is including different economic factors and statistics in its determination and definition of GDP”, Kleinhenz says.
After July 31, GDP will include spending on research and development along with the production of artistic goods and entertainment like television shows, recorded music and movies. It will also include changes in how defined-benefit pension plans are treated.
Kleinhenz said for retailers, business owners and decision makers both in Washington and on Wall Street, GDP statistics are an invaluable resource that captures the direction and trends of the various components of the economy. “While many of these changes are technical in nature and of interest mostly to those of us who closely follow the numbers, everyone depends on this data even if they don’t know it”, Kleinhenz notes.
To read the entire NRF story, click here.