Revisions to the U.S. gross domestic product since 2011 reinforce the shift to a slower era of economic growth and underscore the difficulties the Federal Reserve faces in gauging just when to inch interest rates away from the zero-lower bound. According to the Bureau of Economic Analysis, real GDP from 2011 to 2014 increased at an annual rate of 2 percent, a downgrade from the prior estimate of 2.3 percent.
More details in this article: U.S. believes no structural issues in GDP data construction (an Orwellian title if we’ve ever heard one). An excerpt:
The improvements to the seasonal adjustment for defense spending found an overstating of GDP growth in the third quarter from 2012 to 2014. Third-quarter growth in 2012 was revised down by 2 percentage points to a 0.5 percent rate, with defense spending accounting for a half a percentage point of the drop.
So basically all of the recent hulabaloo recently about how Q1 is being consistently underestimated has been completely dwarfed and rendered moot by how much Q2 and Q3 have been over-estimated… especially when it comes to counting the effect of defense spending. Who coulda known ???