Module 2 Extra Credit Posts for Fall 2025

I'm "banking one" for future coverage some day. About 10 days ago, someone asked me about more involved unemployment statistics, like people who have part-time jobs but want full-time ones. In that conversation, I also mentioned that there are people who have to work overtime, but  don't really want to. In addition, it's been in the news that long-term unemployment is creeping up. So anyway, one of these days we'll spend some time looking at all of those.

September 26th

Real GDP in the U.S. is announced quarterly. It's on a schedule. 

Since it's a flow, it is measured over a period of time, and you can't start counting until that period is done. So the quarter ends, and they release their first GDP number on the last Thursday of the following month.

It's done sort'of like how you're supposed to do a paper for an English class: a draft, a revision, and a final version. They come out a month apart.

The third quarter of 2025 is coming to an end next week. So we'll find out about how the economy has been doing this past summer just before Halloween.

But, yesterday, we go the final version of the GDP growth rate for the second quarter (usually noted as 2025 II or 2025q2). It was a fairly large upward revision, indicating that the economy was stronger than we thought it was. The new real growth rate was 3.8%/year, which was revised upward from 3.3%, which in turn had been revised upward from 3.0%. 

Revisions of this size are big, but not terribly unusual. 

Both revisions  going in the same direction is also fairly common.

All of these numbers are well above the 1.5%/year or so rate that we need to feel good about the economy.

Digression: I mentioned with the unemployment rate that the limit of what you can feel is changes of about 0.5%. So the government data often shows changes that are sharper than what you can actually feel (until a few months have passed going in the same direction). Real GDP growth rates are similar: most people can feel changes of about 1%. So you could think of 1.5% an neutral, 2.5% as fair, 3.5% as good, and 4.5% as excellent.

P.S. We don't focus on nominal GDP much, but sometimes students are interested. It is estimated from the second quarter that it is $30,485,729,000,000 /year. That seems like a ridiculously big number, but remember that there's like 330,000,000 people in the U.S., most of whom are contributing tens of thousands of dollars to that (or more).

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