GDP figures for the US came out today. They recorded an increase of 5.7% in Real GDP over the December Quarter (Annualised). While this is definitely cause for celebration, statistically it is a bit dodgy.
The Australia ABS does not annualised its GDP figures. The quarterly change in the figures is just that; they take the GDP figure for this quarter, they subtract the GDP figure from the previous quarter and then divide by the GDP from the previous quarter. So it is
(GDP(now) - GDP (previous))/GDP(previous). This produces the quarterly growth.
The US bureau of Economic Analysis however use the same formula above, but then convert it to an annual rate (by dividing by the number of months in the quarter and then multiplying by 12). This gives you the annualized rate (which will be higher than the percentage change from month to month).
So based on the ABS methodology, we have the US Real GDP growing 1.4% over the quarter. (and only 0.1% over the year to date, from December 08 to December 09). Better to be growing than contracting, but still not great numbers over the year.
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