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Later this morning, the Bureau of Economic Analysis will publish its final print on Q1 GDP. The consensus is looking for a 1.9 per cent growth rate.However, Deutsche Bank’s Joe LaVorgna notes that this isn’t really the final print. From his note:
“The final print on Q1 real GDP is not really “final” because the Bureau of Economic Analysis (BEA) will revise GDP back three years when the “advance” estimate for Q2 output is released on July 27. Then in July 2013, the BEA will release comprehensive revisions—this happens about every five years or so—where the entire history of the economy is susceptible to revision. As we have stated numerous times, large GDP revisions are commonplace. For example, since 2003 the average revision to real GDP growth from the advance release to the latest value has been -0.6%. However, the absolute average revision has been 1.0% and the standard deviation on the revision has been 1.3%.”
Sure, this doesn’t really change anything since it’s all in the past. But LaVorgna warns that it can affect sentiment:
“These are sizeable numbers and depending on next month’s revisions, investors’ perceptions of the economy can certainly change. Remember that it was last year’s downward revisions to H2 2010 and H1 2011 that caused financial markets to worry about another recession.”
The final print of Q1 GDP will be released at 8:30 AM EST. We’ll cover it LIVE at Business Insider.
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