On July 29, 2011, the U.S. Bureau of Economic Analysis (BEA) released a flexible annual revision to the U.S. national income and product accounts. Real GDP growth was subject to large downward revisions. The author uses the Philadelphia Fed's real-time data set to compare the size of the recent revision with that of past annual revisions since 1966. The author finds:

  • Large downward revisions are not uncommon in the annual revisions of recent years. In this regard, the 2011 annual revision does not stand out;
  • Revisions are correlated with the state of the economy, as measured by real GDP growth itself and indicators of recession.1
  1. The author thanks John Chew for his assistance in assembling the data for this analysis.