Revisionist history is usually spoken about in negative terms. But in the economics world, it happens all the time. And this week will probably present be a more dramatic example than usual.
The government on Thursday is scheduled to release the revised estimate of gross domestic product for the fourth quarter of 2012. When the initial GDP reading was released about a month ago, it showed a shocking decline of 0.1 percent. It was almost immediately dismissed by economists who said it wouldn't stand when further data were released. The revision is due at 8:30 a.m. Eastern time.
Economist Robert Brusca, with Fact and Opinion Economics, explains it this way: "Subsequent to the GDP release, another unexpected development -- a sharp reduction in the U.S. trade deficit in December -- will breathe life back into GDP when it is revised." As a result, Brusca predicts "the revision should push GDP growth back into positive territory for the fourth quarter."
Don't look for an "off-to-the-races" stock market rally when and if that upward revision is released. As Brusca puts it, "Markets are prepared to put that unpleasant experience behind them and they look forward to seeing positive GDP growth in the upcoming revision."
Consumer Confidence Index
Also this week, The Conference Board is set to release its Consumer Confidence Index at 10 a.m. Tuesday (all times eastern). Economist Jeffrey Rosen of Briefing.com is looking for better news there, too, even if it might not hold up in the longer term. In January, the index fell 8 points to 58.6, erasing all of the gains seen in 2012. Some of that was blamed on the rollback of the payroll tax cut, part of the economic winds swirling around the "fiscal cliff."
Says Rosen: "Confidence likely improved in February as higher equity prices offset the negative effects of higher gasoline prices." But he says the same problems may come back to haunt consumers and the broader economy. "Unless Congress can come to an agreement and delay the sequestration that begins on March 1, a cutback in government services will wreak havoc on confidence."
Another gauge of how the consumer is doing will be seen in the monthly sales figures released Friday by auto manufacturers. Automotive information provider Edmunds.com predicts total new-car and truck sales will be up nearly 15 percent from January and up more than 4 percent from February 2012. It cites as positive factors "pent-up demand and widespread access to credit." If those figures are right, they would seem to run counter to the notion of dampened consumer confidence.
Other key figures due out during the week include new home sales (10 a.m. Tuesday) and the Institute for Supply Management's manufacturing index (10 a.m. Friday).
This week in history
There was a time in our history where mass media wasn't anything like it is today, a time when instant connectivity wasn't available or even conceivable.
But a milestone on the way to the adoption of current-day technology occurred March 1, 1893, when Nikola Tesla is said to have given the first public demonstration of the principles of radio, in St. Louis. Commercial radio began to take hold in the U.S. in the 1920s and then the popular adoption of television, of course, came decades after that.