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Quarterly Review 1343

A Simple Way to Estimate Current-Quarter GNP

Preston J. Miller | Former Vice President and Monetary Adviser
Terry J. Fitzgerald | Senior Economist and Vice President

Fall 1989

Abstract
This paper describes a method developed to predict the advance (first) estimate of inflation-adjusted gross national product (real GNP) using hours-worked data. Besides generating fairly accurate forecasts of advance GNP, the method has two implications. First, the Commerce Department seems to weigh the hours-worked data most heavily in its early estimates of real GNP but less and less so in its revised estimates. Second, analysts attempting to predict current-quarter outcomes in real time need to consider the availability and reliability of data at the time the forecasts are made.


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