Justin Wolfers continues to remind everyone that we have two measures of the size of the US economy, Gross Domestic Production and Gross Domestic Income.

It turns out that GDI is more accurate in real time that GDP.

That’s true.

However, a couple of things

1) My understanding is that were we get most of the movement is on inventories and imports. If we look at Final Sales of Domestic Product its much more stable under revision that GDP.

2) I, at least, can’t get much out of the GDI report. It breaks things up into where people got their income from: wages, profits, interest and rent.

However, with exception of rent that doesn’t tell me a lot about what’s going on in the economy. Especially, when we think we are dealing with demand constrained output, what we are interested in is the proximate sources of demand. We get that out of GDP, not GDI.

So while GDI is something of a guide to revisions, I think we should be careful about discounting the GDP tabulation too much. Its still our most comprehensive source on the real time movements in the economy.

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