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A Simple Way to Estimate Current-Quarter GNP


Preston J. Miller Former Vice President and Monetary Adviser
Terry J. Fitzgerald Vice President & Assistant Director, Economic Analysis (former)
A Simple Way to Estimate Current-Quarter GNP


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.