Friday, February 27, 2009

GDP revision is all about INVENTORY

FT Alphaville » Blog Archive » A GDP primer:

What happened with the Q4 GDP estimates, is that the FINAL SALES figure did not change much (revised down from -5.9% to -6.4%) but the government made a massive change to the INVENTORIES figure (revising inventories from a rise of $6.2 billion to a fall of $19.9 billion).

So the inventory shift produced a huge revision in the HEADLINE GDP figure, revised from -3.8% to -6.2%."

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