GDP is a measure of output from the spending side.  A standard alternative measure is Gross Domestic Output (GDO), the average of GDP and GDI.

Figure 1: GDP (blue), Goldman Sachs tracking estimate of 53 (light blue square), estimate of GDO (tan), GDP+ (green), and final sales (red), all in bn.Ch.2017$ SAAR. Estimate of GDO calculated by using assuming 12.8% increase in net operating surplus, y/y. GDP+ calculated by iterating growth rates on 2021Q4 level of GDP. Source: BEA 2025Q1 advance, Goldman Sachs, Philadelphia Fed, and author’s calculations.

The increase in net operating surplus is estimated by applying a 12.9% estimated increase in corporate profits to 2024Q1 net operating surplus.

Goldman Sachs notes:

we believe inventory investment was significantly understated, which means that GDP was significantly understated too.

We expect this distortion to reverse in Q2. Our current forecast of +2.4% assumes that measured imports decline sharply but measured

Keep reading this article on Econbrowser Blog - James Hamilton & Menzie Chinn.

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