From Calculated Risk and the government:
The headline GDP number was revised up to 5.9% annualized growth in Q4 (from 5.7%), however most of the improvement in the revision came from changes in private inventories. Excluding inventory changes, GDP would have been revised down to around 1.9% from 2.2%.
Not really any encouragement here. Yes, the overall is revised up 0.2 points, but what really counts for a sustained recovery was actually revised down 0.3 points. The risk of a stumble and falling into a double-dip recession is looking stronger.
Krugman explains “core inflation” and the measurement thereof:
So: core inflation is usually measured by taking food and energy out of the price index; but there are alternative measures, like trimmed-mean and median inflation, which are getting increasing attention.
First, let me clear up a couple of misconceptions. Core inflation is not used for things like calculating cost-of-living adjustments for Social Security; those use the regular CPI.
And people who say things like “That’s a stupid concept — people have to spend money on food and gas, so they should be in your inflation measures” are missing the point. Core inflation isn’t supposed to measure the cost of living, it’s supposed to measure something else: inflation inertia.
For the full explanation, go to the link.