Last Quarter GDP Growth Revised to 0%
Yesterday, the Bureau of Economic Analysis (BEA) released its report of the Gross Domestic Product (GDP) by state for the second quarter of 2019. At first glance the report has middling news for the state of Louisiana. According to the report, the Pelican state saw growth of 1.7 percent. While lower than all its neighbors, it ranked Louisiana 29th overall and exactly in line with the Southeastern United States overall.
This fact has been widely reported, and even celebrated by some as proof that Louisiana is getting back on track and creating the jobs and opportunity this state has been sorely lacking.
But this most recent report by the BEA didn’t simply show the GDP around the country for the second quarter of 2019, it also revised its estimates for the first quarter of 2019. And for the state of the Louisiana, what a revision it was.
The first quarter growth was widely acknowledged, even by some skeptics, as a good sign for the Louisiana economy with a reported growth of 3.8 percent. But this most recent report revises that growth number to a whopping 0 percent. Revisions are nothing new, after all measuring economic growth isn’t an exact science, but this revision is massive.
Averaging out the first two quarters of economic growth in 2019, Louisiana now ranks a paltry 42ndoverall in terms of economic growth. This places Louisiana firmly last among southeastern states and yet again in the bottom 10 of a ranking in which Louisiana would prefer to be in the top 10.
This incident has two important lessons. Foremost, buying into economic data from only one quarterly report is likely to lead you astray. Due to how economic data is collected, its important to take a much longer-term view of any economy. Secondly, the long-term view of the Louisiana economy is not good.
The “Real” GDP of Louisiana, that is GDP indexed to inflation, has been on the decline since 2010 and shows no signs of turning around. Other economic measures reflect this broad trend whether it’s a declining population or civilian labor force. The Louisiana economy isn’t producing jobs and opportunity.
Proponents of the status quo are quick to highlight the good in economic reports as a way to pretend the Louisiana economy is working. But the long-term view shows just the opposite. The status quo is broken, and the people of Louisiana feel it.