2Q 2011 GDP revised downward

This morning, the BEA released the second estimate of the 2Q GDP. The rate of growth of the economy was revised downward slightly to 1% for the second quarter (from an “advanced” estimate of 1.3%). The downward revision was due to more complete data, including data that showed that exports were not as strong as first thought.
As I’ve noted in almost every previous posting on GDP, we need to remember that these numbers are only estimates based on incomplete data. And, as I have noted before, the data has a basic problem in that it does not give us any guidance on investment in intangibles other than software. So we do not know whether companies have increased or decreased their investments in important areas such as human and organizational capital. Work is underway in the UK to survey companies on their investments in intangible assets. We should be doing the same here.

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