By Mish Shedlock of MishTalk

The BEA released its final estimate of first-quarter 2023 GDP. The GDP vs GDI discrepancy is one of the largest ever.

Gross Domestic Product (GDP) and Gross Domestic Income (GDI) are two measures of the same thing. They are supposed to match, and will over time, with revisions in at least one of the measures.

Real Final Sales is the bottom line estimate of Real GDP. The word real, means inflation-adjusted.

Today the BEA released its Third Estimate of First Quarter 2023 GDP and an update on GDI as well.

BEA Highlights

The BEA averages GDP and GDI on the basis that it does not know which measure is more accurate. The NBER, the official arbiter of US recessions does the same thing.

However, the NBER is so late in issuing its recession calls, it will be clear which one of the current estimates is more accurate.

Largest Discrepancy in at Least 20 Years

Q&A on the Discrepancy

The average is very weak, near-zero growth letting everyone believe what they want about the strength of the economy. The divergence between jobs and employment is also in play.

Jobs vs Employment Discrepancy

I have been covering the discrepancy between jobs and employment for over a year.

My most recent update was on June 2, in Huge Jobs Divergence Returns, Jobs +339,000 but Employment -310,000

Payrolls vs Employment Since May 2022

Of the 894,000 rise in employment in January, 810,000 was due to annual benchmark revisions. And the BLS does not say what months were revised, just poof, here you go.

Think There’s a Strong Labor Market? Then Think Again

Hours worked data from the BLS

Across the board, people are working much fewer hours per week than pre-pandemic. 

The hours view and the employment vs jobs view hints that the GDI view is closer to the mark than the GDP view. For discussion, please see Think There’s a Strong Labor Market? Then Think Again