Recent Updates
- Global Supply Chain Pressure Index (Mar, Apr)
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Economy in Brief
U.S. Mortgage Applications Continued to Slide Amid Higher Rates
The biggest declines have been in refinancing activity, while applications for purchase are just starting to crack...
UK Inflation Jumps
Inflation is at the highest rate since the series began in January of 1989...
U.S. Industrial Production Much Stronger than Expected in April
The increase in manufacturing output in April was once again led by motor vehicle and parts production...
U.S. Retail Sales Posted Solid Rise in April
Notwithstanding falling real incomes and declining confidence measures, consumer spending posted a solid increase...
U.S. Home Builder Index Took a Steep Drop in May
This is the fifth straight month that builder sentiment has declined...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
Profits and Margins Plunge In Q1: Expect More Margin Contraction As Fed Squeezes Inflation
The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation & Fed Policy: A Relationship Which Should Worry The Fed And Scare Investors
Why Have the Yields on TIPS Been Negative in the Past Two Years?
by Charles Steindel December 13, 2019
On December 12 BEA released comprehensive data on GDP by county (as well as metropolitan areas) for the years 2001 to 2018. The emphasis in the release was on the real growth estimates for 2018. While the interest in such figures is understandable, it should be understood that they are very dependent on the methodology BEA uses to produce them. Economic Census data allow one to construct plausible estimates of nominal GDP in local areas for those years; at other times BEA has to do considerable interpolation and extrapolation, though QCEW data allows for good higher frequency data on employee compensation at the local level. Furthermore, to construct real estimates, BEA assumes that output and input prices for an industry are uniform across the nation. If one thinks about smaller counties which might be dominated by a few establishments in one industry or sector, it is not implausible to believe that the particular production technology used in one, and prices and costs, may be considerably different than in other localities. One important instance where one might scratch one’s head about the real growth estimates is the report that the real output of New York County, New York, edged down in 2018, due to a contraction in financial output. Given the difficulties of calculating real financial output one might question that finding.
As noted, nominal GDP numbers for counties may be a bit firmer than the real figures. Unsurprisingly, nominal output is heavily concentrated in a handful of counties. The four largest (Los Angeles, New York, Cook, and Harris) accounted for more than 10 percent of national GDP in 2018; the 31 (this list includes DC as a county) with nominal GDP estimated to be $100 billion or more accounted for nearly one-third of the nation’s output. In contrast, the combined GDP of the nearly 1000 counties reported to have had nominal output in 2018 less than $50 million (the smallest was the $17.5 million of Petroleum County, Montana) was only about 1 percent of the national total.