Commerce Unveils New Economic Statistics
October 29, 1999
Concerned that its numbers were not fully capturing the economic dynamism of the 1990s, the Commerce Department has revamped its formulas and come forth with an improved picture.
The new figures show that spending is stronger, investment is greater, productivity is higher and inflation is a little lower than previously thought.
- The U.S. produced an estimated $8.76 trillion worth of goods and services last year -- $248 billion more than under the old method of measuring economic growth.
- The personal savings rate -- which former calculations listed as close to zero -- was revised to 3.7 percent of income in 1998.
- In the last four years, through the third quarter of 1999, gross domestic product rose at an average annual rate of 4.1 -- up four-tenths of a percentage point from earlier figures.
- For the 1990s as a whole, the economy grew at an average annual rate of nearly 3 percent -- up half a percentage point after the revision.
From 1947 until 1973, the rate of productivity growth advanced at a robust annual average of 2.8 percent. And then for reasons not yet explained, it slumped to 1 percent of so for 25 years. There has been a partial rebound since 1995, and the revisions suggest that the average has lately been roughly 2 percent, or a bit more.
Experts believe than when productivity grows 1 percent a year, it takes 72 years for the standard of living to double -- and 36 years when growth is 2 percent.
Despite all the good news the revised figures reveal, they fall short of the prosperity achieved in earlier booms since World War II. Even compared to the strongest period of the current expansion, there were stronger spurts of economic growth during the 1980s, 1970s and 1960s.
Source: Louis Uchitelle, "A Clearer View of the Economy," New York Times, October 29, 1999.
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