The NYT told readers:
"The Federal Statistics Office in Germany reported on Friday that gross domestic product grew 1.5 percent over the previous quarter, when harsh winter weather had held growth to just 0.4 percent."
Let's see, GDP growth in the United States was 1.8 percent in the first quarter, so I guess we're doing a bit better than Germany at this point.
Wrong!!!! The growth figure reported by in this article is a quarterly rate of growth. The annual rate of growth in Germany in the first quarter was a very solid 6.1 percent.
It is difficult to understand why the media insist on reporting quarterly rates of growth when the standard in the United States is to report GDP growth as an annual rate. Often it is not even clear that the growth being reported is a quarterly rate. For example, later in this piece the NYT tells us:
"France, too, surpassed expectations with growth of 1 percent, the steepest increase since spring 2006, according to the statistics office Insee in Paris. That compared to an increase of just 0.3 percent in the last quarter of 2010, and a median forecast of economists surveyed by Reuters and Bloomberg News of 0.6 percent."
This is like reporting the temperature in a European country as being 20 degrees without bothering to tell readers that this is the temperature measured on the Centigrade system. Presumably the point of this article is to convey information to readers. If we want to let people in the United States know how hot it is in France then the proper way to do this is to convert the Centigrade measure into a Fahrenheit measure.
If the point is to let people in the United States know how fast Germany and France are growing then the growth rates should be reported as annual rates. It's that simple.
[Addendum: I corrected the German growth figure from 4.9 percent that I had gotten from a Wall Street Journal article. What I took to be an annual rate of growth for the first quarter was in fact a year over year rate of growth. Stefan Karlsson had the correct number.]
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