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
- The author thanks John Chew for his assistance in assembling the data for this analysis.