Advance 4th Quarter GDP Number, 3,2 Percent, Subject To Big Later Revisions

The US Department of Commerce Bureau of Economic Analysis released the advance GDP number for the fourth quarter 2010. Real GDP increased by 3.2 percent, annualized from the third quarter of 2010.

The advance number is an early estimate of final GDP annualized percent change from the previous quarter and it is often later substantially revised. Check out the recent huge differences between the advance GDP annualized 4th quarter percent change numbers and the final revised GDP annualized 4th quarter percent change numbers in the following table:

Quarter							Advance							Final							Change
2007q4							0.6							2.9							2.3
2008q4							-3.8							-6.8							-3.0
2009q4							5.7							5.0							-0.7
2010q4							3.2							?							?

As you can see from the above table, final 4th quarter 2010 GDP annualized percent change from the 3rd quarter can be significantly different than the initial estimated advance number of 3.2 percent.

I chuckle when I see all the news articles and blogs comparing the latest advance GDP number with previous final GDP numbers. It is an apples and oranges comparison. Advance numbers should be compared against advance numbers and final numbers should be compared against final numbers.