by Calculated Risk on 7/26/2012 10:02:00 PM

On Friday ...
• At 8:30 AM ET, the Q2 advance GDP will be released. The consensus is that real GDP increased 1.2% annualized in Q2. The BEA will also release the revised estimates for 2009 through First Quarter 2012. If GDP is revised significantly up or down, this might be part of the FOMC discussion next week.

The BEA put out an excellent note on revisions this week: Revising Economic Indicators: Here’s Why the Numbers Can Change

The public wants accurate data and wants it as soon as possible. To meet that need, BEA publishes early estimates that are based on partial data. Even though these data aren’t complete, they do provide an accurate general picture of economic activity. ...

BEA produces three estimates of gross domestic product (GDP) for a given quarter. Each includes updated, more complete, and more accurate information as it becomes available. The first, called the “advance” estimate, typically receives the most attention and is released roughly 4 weeks after the end of a quarter. ...

When BEA calculates the advance estimate, the Bureau doesn’t yet have complete source data, with the largest gaps in data related to the third month of the quarter. In particular, the advance estimate is lacking complete source data on inventories, trade, and consumer spending on services. Therefore, BEA must make assumptions for these missing pieces based in part on past trends. ...

As new and more complete data become available, that information is incorporated into the second and third GDP estimates. About 45 percent of the advance estimate is based on initial or early estimates from various monthly and quarterly surveys that are subject to revision for various reasons, including late respondents that are eventually incorporated into the survey results. Another roughly 14 percent of the advance estimate is based on historical trends.

• At 9:55 AM, the final Reuter's/University of Michigan's Consumer sentiment index for July will be released. The consensus is for no change from the preliminary reading of 72.0.


For the monthly economic question contest:

• And at 10:00 AM, the Q2 Housing Vacancies and Homeownership report from the Census Bureau will be released. This data might indicate the trend, but there are serious questions about the accuracy of this survey.