Revisions to Real and Nominal GDP

With today's disappointing advance GDP report which will be revised as new data arrive, I thought it might be worthwhile to look at typical revisions in recent years to see if there is any particular pattern.

I went to the Philadelphia Fed web site where they have vintage data stored and clicked on the Core Variables/ Quarterly Observations/ Quarterly Vintages link. I then used this Excel macro to extract the earliest release and the latest revisions of the real and nominal GDP data. I am not fully confident in these data since they do not match up exactly with the vintage data series extracted from the Alfred archive at the St. Louis Fed. But assuming the data from the Philadelphia Fed are accurate, here is what they show.

First, the table of initial values, the latest revised values, and percentage changes since 2003:Q4:

	Initial   RGDP	Revised RGDP	Initial   NGDP	Revised NGDP
2003:04	10597.1	10502.6	11246.3	11236.0
2004:01	10708.6	10612.5	11447.8	11457.1
2004:02	10778.0	10704.1	11649.3	11666.1
2004:03	10883.4	10808.9	11803.5	11818.8
2004:04	10975.7	10897.1	11967.0	11995.2
2005:01	11078.2	10999.3	12182.7	12198.8
2005:02	11092.0	11089.2	12376.2	12378.0
2005:03	11193.2	11202.3	12589.6	12605.7
	Real Adjustment	Nominal Adjustment	% Change Real	% Change Nominal
2003:04	-94.5	-10.3	-0.89%	-0.09%
2004:01	-96.1	9.3	-0.90%	0.08%
2004:02	-73.9	16.8	-0.69%	0.14%
2004:03	-74.5	15.3	-0.68%	0.13%
2004:04	-78.6	28.2	-0.72%	0.24%
2005:01	-78.9	16.1	-0.71%	0.13%
2005:02	-2.8	1.8	-0.03%	0.01%
2005:03	9.1	16.1	0.08%	0.13%

In general, over the last two years, real GDP has been revised downward while nominal GDP has been revised upward. The average adjustments from 1983 - 2002, a time period not covered in the tables above, according to today's GDP report from the BEA is (these are not directly comparable as the figures below are for adjustments to growth rates - thanks to William Polley for noting that - see his post on the same issue from a year ago):

   Revisions Between Quarterly 
     Percent Changes of GDP: 
       Vintage Comparisons
          [Annual rates]



Current-dollar GDP	 Average

Advance to preliminary......0.1 
Advance to final............ .2 
Preliminary to final........ .0

Advance to latest........... .4


Real GDP		 Average

Advance to preliminary......0.1
Advance to final............ .1
Preliminary to final........ .0


Advance to latest........... .4

NOTE -- These comparisons are based 
on the period from 1983 through 2002.

We'll know more with the preliminary report which comes about a month after the advance numbers, and even more yet with the final report about a month later. The latest estimates also incorporate comprehensive revisions occurring at about five year intervals.