Economist Justin Wolfers has this to say to the nattering nabobs of negativism who practice financial journalism: The economy is not shrinking. Learn how to interpret the numbers.
The numbers in question: growth data from the Commerce Department for the first quarter. Wolfers, a senior fellow at the Peterson Institute for International Economics, gave a tutorial on Twitter:
We have 2 independent (& revised) measures of Q1 growth: GDP: -0.2% (revised from -0.7%) GDI: +1.9%!! (from +1.4%) https://t.co/tn28S6ec9q
— Justin Wolfers (@JustinWolfers) June 24, 2015
So depending on which numbers you believe, the economy either contracted in Q1 or grew around potential. I’m betting on the latter.
— Justin Wolfers (@JustinWolfers) June 24, 2015
Sadly financial journalists are jumping at the more dramatic “the economy shrank in Q1” lede, rather than emphasizing the more reliable data
— Justin Wolfers (@JustinWolfers) June 24, 2015
Feel free to keep believing the economy shrank in Q1, but try explaining it to the businesses that hired hundreds of thousands more workers.
— Justin Wolfers (@JustinWolfers) June 24, 2015