Economic Growth Might be Higher Than We Think, But Only Slightly

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Binyamin Applebaum says the economy may be growing faster than we think:

Buried deep inside the government’s revised estimate of fourth-quarter growth (revised but unchanged at 3 percent annualized) is an alternate measure of economic activity that is winning increased attention. And by that alternate measure, gross domestic income, the annualized pace of growth in the final three months of 2011 actually climbed to 4.4 percent.

That’s the kind of growth we usually see during an economic recovery, the kind of growth that’s fast enough to create new jobs. Indeed, it suggests that we may have learned the answer to a fretful mystery. Until now, economists have struggled to explain why unemployment was falling so fast when the major measure of growth, gross domestic product, was rising at an exceedingly modest pace.

That’s good news. Just a note of caution, though. GDP measures production of goods and services, while GDI measures the income used to buy goods and services. In theory, they should be identical, but noise in the statistics means they don’t always come out quite the same. Sometimes GDI is less than GDP and sometimes it’s more. Last quarter it was more.

But if you look at 2011 as a whole, total growth comes to 1.7% on a GDP basis and 2.1% on a GDI basis. That’s not a huge difference. The higher GDI figure really does suggest that recent growth might have been stronger than we think, but only a little bit stronger.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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