This is Awkward

At the end of January, I posted about the BEA's 2012 fourth quarter GDP growth estimate. It was -0.1% annualized. Most of the decrease was due to cuts in government spending, and reductions in private business inventories (which is typically a sign of negative expectations). Positive contributors to GDP included nonresidential and residential fixed investment. 

The thing was, job numbers and stock market performance were suggestive of positive GDP growth. I expected that GDP growth would be revised up. It was; instead of contracting by 0.1%, the economy grew by 0.1%. It is still a bad number and still out of line with the job market performance. On the other hand inflation growth is slowing, and in urban areas has sat at 0% for a couple months now, which can indicate slowing growth.

Basically who knows.

Medical Malpractice

Here's a long post, it's about medical malpractice:

Malpractice is one of the most public and emotional issues in the topic of health care and health reform. For decades frivolous lawsuits, out of control awards, and increasing malpractice insurance costs have been blamed for increasing the cost of health care. The reality is much more complicated. The malpractice system is not a substantial factor behind health care costs or a contributor to rising health care cost. But the benefit of the system is very much in question. The malpractice system must both compensate victims and deter negligence to be effective; it struggles to do either. 

January Jobs Report

The January Jobs report came out Friday along with annual revisions to past jobs numbers. Job growth in January was 157,000, a relatively average number for the current recovery. The unemployment rate went up by 0.1% due to revisions to population and labor force estimates. The better news is the direction of the revisions to past numbers. November was revised up from 161,000 to 247,000 jobs added, a strong performance in the context of the recovery. December was revised up from 155,000 to 196,000. Generally speaking, the revisions to older months were upwards in direction. There were even a couple months of job growth above 300,000.

The graph below shows the revised numbers in white, and the previous numbers in red.




The jobs report gives further evidence in conflict with the fourth quarter contraction in GDP indicated in the BEA's preliminary estimates. As I noted in the previous post, these estimates are always revised to some degree, sometimes by over a percentage point. When looking at other indicators of economic strength, it seems very likely that GDP did in fact expand in the fourth quarter.