Using Gross Output (GO) that the Bureau of Economic Analysis (BEA) has been releasing every quarter since April 2014, David Ranson, chief economist for the private forecasting firm HCWE & Co., has been tracking and analyzing the relationship between GDP and GO since mid-2016.
According to Mr. Ranson, “Movements in gross output serve as a leading indicator of movements in GDP”, as his model indicates that the GO rate of change and magnitude can anticipate GDP changes up to 12 weeks in advance.
The graph below illustrates the relative growth rates of GDP, GO, and Intermediate Output (IO) in real terms.
Graph Credit: David Ranson, HCWE & Co.
Data: Quarterly chain-type quantity indexes. See Interactive data/Industry Data/GDP-by-industry/Gross Output by industry (Bureau of Economic Analysis).
Real GDP labels show quarterly growth re-expressed as seasonally adjusted annual rates.