November 02, 2011
A top of the hour Morning Edition news segment told listeners that GDP growth nearly doubled from the second quarter to the third quarter, going from 1.3 percent to 2.5 percent. This is not a useful comparison.
The relevant comparison would be the percentage point change in the growth rate. For example, an increase in growth from 3.0 percent to 5.0 percent is far more meaningful than the rise from the first quarter to the second quarter, even though it is a near-doubling of the growth rate. When growth is slow, an increase that is large measured as a percent of the prior quarter’s growth is not a big deal.
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