Something strange happened yesterday when the Bureau of Economic Analysis released the final estimate of Q2 GDP data: as part of the release, Biden’s Dept of Commerce run by Gina Raimondo, which also runs the BEA, reported that GDP in since 2020 had been revised markedly higher (with the exception of H2 2023) …
So what happened?
Recall that about a year ago, questions started to swirl around the record divergence between Gross Domestic Product (GDP, or also known as Gross Domestic Output) and Gross Domestic Income (GDI), which unlike GDP also captures various interest payments, mostly to and from the Federal Reserve.
Ironically, back in September 2023, JPMorgan expected that GDP would catch down to GDI, resulting in a much weaker GDP print. That did not happen, because the Biden admin came up with a last minute sticksave that revised historical data to make it seem the US was stronger than previously thought.
Fast forward to this week, when Goldman was looking at the same gap, and also at the divergence between various GDP components as reported and their revisions, and also expected that historical GDP would be revised much lower (also catching down to GDI). That too did not happen, because the Biden admin… well, it pretty much did the same thing again.
What did happen, is that not only was GDI revised sharply higher, effectively closing the record divergence between the two series by boosting various interest income assumptions of GDI.
Hellbound and Down 