U.S. economy to 'grow' 3% under new GDP calculation
With a chart showing federal spending as a percentage of Gross Domestic Product in the background, U.S. Treasury Secretary Timothy Geithner testifies before the Senate Budget Committee March 12, 2009 on Capitol Hill in Washington, DC.
In July of 2013, the U.S. gross domestic product will officially grow three percent, due to a few additions to the statistics that economists have been using to calculate GDP for years.
From now on, government statisticians will take into account money earned from creative works including movies, television shows, books, theater and music. Money spent on research and development, which has, until now, been considered a cost of doing business will also be included.
Lewis Alexander, chief U.S. economist for Nomura, says the new additions are meant to reflect a shift in what’s important in a twenty-first century economy.
“You can think of it as the growing importance of the IT industry, but obviously the entertainment industry as well,” Alexander said.
Still, economists say that while the new additions will boost GDP, they will be too small to fundamentally change our view of how the economy is doing.