Estimate for 4Q GDP growth in intangible revised again

BEA has released its third (what was formerly called the “final”) estimate of US GDP. And once again there was a large change in the growth rate for intellectual property products (IPP), i.e. research and development; entertainment, literary, and artistic originals; and software. This latest estimate shows a 4.0% growth rate. Last month’s second estimate had an IPP growth rate of 8.0% and the advanced estimate’s growth rate was 3.2%. So the advanced estimate turns out to be closer to the real number. No explanation from BEA as to why the spike in the second estimate. But we really need to understand why the fluke occurred. The IPP data is a new addition to GDP and we need to make sure we get it right.
On the macro side, the third estimate shows a 4th Quarter 2013 growth rate of 2.6%. That is slight revision upward from the second estimate last month of 2.4% but still below the advanced estimate of 3.2%. The growth rate for the 3rd Quarter had been 4.1% – so the economy did slow somewhat at the end of last year. The latest revision is in keeping with economists’ forecast of a 2.7% growth rate.
IPP percent 4Q13 -3rd.png

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