The larger point stands it’s just ‘but people are talking about single digit GDP percentage point declines‘ that I was correcting. That said, Pennsylvania and several other states waited until April to order a shutdown, but the observed GDP decline was annualizing a ~1% though there was growth in the ready of Q1.
Long story short, that 4.8% is absolutely worthless.
The bit you quote from me seems strictly accurate; by single digit I mean < 10%. That is what the news is reporting. It is factual, and my inference that the economy is not shut down hasn't been questioned.
Saying that the difference is larger when you consider only part of the quarter is correct too, but 4.8% is not "absolutely worthless", it just needs to be interpreted properly.
As in my previous comment, you can approximately derive the actual amount of decline, which is a fraction of a complete shutdown.
By absolutely worthless I mean it’s a meaningless calculation. They take the actual change averaged out over a quarter, and then assume 4 more quarters will have exactly the same thing happen.
It’s a common calculation used to make quarterly numbers seem more important, but it’s at best misleading if not actively deceptive.
Wait, wait, wait. Nothing is "meaningless" if it contains information. And "misleading" depends entirely on context.
It sounds as though you are suggesting I made an error that increases the apparent size of the shutdown, meaning it is actually smaller and my claim is stronger than I thought.
If the figures are annualized (I checked* and I think you're right) then it improves my original point - the 4.8% decline becomes 1.2% un-annualized, and the normal trend of +2% becomes +0.5%.
The equation should then be something like .167 * x + .833 * 1.005 = .988, "x" being the percentage of the economy active in the last half month, or about 90%.
I'm confident that there is information in the reported figure and that no reasonable calculation can show the economy was shut down completely.
You’re ignoring information that you disagree with. Yep, of the multiple errors in your calculation, one of them lowers the estimate. But, I never said anything about a 100% shutdown just that single digit comment.
Going in the other direction, picking the earliest possible starting date underestimates the impact as does ignoring panic buying. Layoffs where also not instantaneous, and people’s final paychecks are delayed etc. All of this is going to show up in Q2 numbers even if many states are scaling back their shutdowns.
As to being a meaningless calculation, you’re describing a reversible calculation not a useful one. I can type a message in ROT13 and the result contains the same content, that does not make me doing the ROT13 useful.
"You’re ignoring information that you disagree with"
You're the one saying information is "meaningless", and at the same time I don't see any alternative data that you've provided. You're just making general statements that sound to me like the fallacy that imprecision means no information.
In your first reponse to me, you wrote:
"It requires a very large decline to average out to ‘just’ 1%"
So, "very large" is subjective, but I don't think 10% is "very large" in the context of people talking about 100% of the economy being down.
It’s imprecise enough that you’re better using other means to estimate the decline. I am between 1cm and 1 mile tall, is true but does not convey new information.
Similarly without knowing how fast was the economy was growing or shrinking before the decline, the decline hit, when peak decline hit, it’s impossible to say how bad things where at the end of the quarter beyond well it’s worse. I mean presumably when news of the outbreak hit but before the shutdown there was some effect, but I don’t know if it was a net positive or negative.
If you want numbers I would say 10+x larger is objectively a very large decline relative to 1%. Anyone talking about a 100% shutdown while still buying food is being using hyperbolic or simply does not understand what their words mean. It’s at best symbolically true in that net wealth is being destroyed so the engine of human progress has shut down.
Long story short, that 4.8% is absolutely worthless.
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