Every year in July, the national income data, including gross national product (the measure recording United States production of goods and services), are revised for the preceding three years. This year, we learn that the last three years were stronger than we believed. We also find the gain in the first quarter of this year was smaller than we had believed.
Just where is the US economy going? With today's economic statistics, confusing is the name of the game.
Earlier in the year, we believed the Federal Reserve Board's index of industrial production had decreased to 126.8 in March from 127.1 in February and had fallen to 126.3 in April. Data now available show a slight increase in March to 127.3 from 127.2 in February and a leveling off in April, not the earlier significant decrease.
Nonagricultural employment earlier in the year was 101.6 million in January; now it is 100.9 million in January and did not reach 101.6 million until April.
With such unclear economic data, one can see why economists find it difficult to tell you just what is happening to the economy. A higher GNP in the second quarter seems encouraging, but month to month, what kind of growth are we dealing with?
To begin to answer that question, one has to look at economic statistics measuring monthly activity. But because any one statistic is subject to revision later on, it is wise to look at a number of economic measures:
Personal income, adjusted for inflation and excluding government transfer payments, virtually leveled off from March through June.
Nonagricultural employment rose more slowly from March through June than in the previous three months.
Manufacturing and trade sales, adjusted for inflation, leveled off in April and May (June data are not yet available).
Industrial production rose more quickly from March through June than in the first quarter.
The unemployment rate improved more rapidly from March through June than in the previous three months.
At least none of these measurements is in decline. But a clear picture of the economy's course and its rate of change does not emerge from these economic indicators. Look at one economic measure and you see one thing, look at another and you see something else.
The US economy is in its fifth year of upswing since the 1981-82 recession ended. The new data for 1984 to date reveal better growth than had previously been believed, but even the new data show economic growth has failed to maintain its pre-1979 rate of growth.
There is little evidence in the economy's behavior in the second quarter of 1987 to confirm any significant change in this record of inadequate growth during the preceding three years.
Keep watching as the months roll by - and watch a large number of economic measures. Otherwise, now you'll see it and now you won't. But if you do watch carefully, I suspect you will see a picture emerge showing the economy laboring to continue moving ahead.
David Francis, whose column normally appears in this space, is on vacation.