Commerce Agency's Revised GNP Data Change View of Economic Performance
WASHINGTON -- When the Commerce Department released figures late last year showing a substantial improvement in economic growth during the fourth quarter of 1984, the news was cheered by traders, economic analysts and politicians alike.</br></br>But last week the department released revised figures indicating those cheers were for nought. Instead of growing at an inflation-adjusted 4.3% rate, as previously thought, the new figures showed economic growth was limping in the fourth quarter of 1984 at a meager 0.6% pace.</br></br>That drastic change illustrates how the highly technical "benchmark" statistical revisions completed recently by the department have revamped the economic landscape. The department is the sole source of statistics on the nation's total output, or gross national product, and when it alters its numbers, it alters everyone else's view of the world.</br></br>The department's revisions altered virtually all the GNP figures back to 1972, and in some cases reached as far back as 1929. The revisions reflected newly available information, improved estimating techniques and a shift in the price "base," used in adjusting GNP for inflation, to 1982 from 1972.</br></br>For the Reagan administration, the revisions make the economic record look less successful. The revisions show, among other things, that the 1982 recession was more severe than previously thought, and that the expansion that has followed isn't quite as strong as earlier statistics had suggested.