Courtesy of Mish.
Understanding the Construction Revisions
Yesterday I commented Government "Processing Error" Sinks Housing Reports for Entire Year.
In that article, I stated 2015 GDP would be revised lower. Some disagree.
For example, MarketWatch reports IHS Global Insight US economist Patrick Newport wrote in a research note "The upward revision to spending in 2014 is enough to raise growth that year from 2.4% to 2.6%-2.7%. The revisions are likely to boost growth for 2015 as well."
Let's investigate that claim with a look at the actual revised construction data as posted by the Census Bureau.
Note: Don't study this table too long. Instead, skip to the analysis and tables that follow.
Initially Reported vs. Revised – Seasonally Adjusted Data
Construction Spending Revised Lower 7 Consecutive Months!
For two years, construction spending went up vs. previous reported data. The net effect is GDP did indeed rise more than reported in 2014. The flip side is 2015 GDP will be lower than previous reported.
To understand why, we need to look at month over month differences as compared to previously reported numbers. Let's take a look.
Total Construction Spending vs. Previous Reports …
