Revisions show slightly smaller GDP drop last year
WASHINGTON (AP) — The U.S. economy contracted by a slightly smaller amount last year than previously reported and grew slightly more in 2019 and slightly less in 2018.
Those are the results from the government’s annual benchmark revisions of the gross domestic product, the economy’s total output of goods and services, that were released Thursday.
This year, the government took the revisions all the way back to 1999 but the new GDP estimates, based on updated source data, showed only small changes or in many years, no changes at all to GDP growth.
For 2020, the GDP shrank by 3.4%, slightly less than the 3.5% reported before the revisions. The slight upward revision reflected newfound strength in such areas as state and local government spending which offset downward revisions to business investment and exports.
The 3.4% decline in 2020 was still the biggest annual decline for GDP since an 11.6% drop in 1946 when the country was demobilizing after World War II.
The GDP revisions Thursday boosted growth slightly to 2.3% in 2019, up from 2.2%.
Growth was trimmed to 2.9% in 2018, down from the previously reported 3%, a figure the Trump administration often cited as evidence that Donald Trump’s economic policies were working better than the policies of the Obama administration.
Growth in 2017 was unchanged at 2.3% and 2016 growth remained at 1.7%.
For this annual revision, the government used updated statistics to make changes to GDP going all the way back to 1999. However, all the changes were very small, usually just one-tenth of a percentage point up or down. Growth in 1999 remained unchanged at a sizzling 4.8%.
The modifications to GDP will not affect the decisions of the National Bureau of Economic Research on when last year’s recession began and ended. The NBER uses a range of data including unemployment levels in addition to GDP to date the beginning and end of recessions.
The panel of academic economists on the NBER’s cycle dating committee announced earlier this month that the recession triggered by the coronavirus pandemic ended in April 2020, just two months after it had started, making it the shortest downturn in U.S. history.
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