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An General Motors employee works on the assembly line at GM’s assembly plant in Wentzville, Mo.
An General Motors employee works on the assembly line at GM’s assembly plant in Wentzville, Mo.
(Sarah Conard/REUTERS)

New U.S. gross output metric shows merit of stimulus

A new U.S. economic statistic, gross output, usefully focuses on what’s being made, not on consumption. The measure underlines how suddenly economic activity plunged from 2008 to 2009, and suggests monetary stimulus worked better than the fiscal response which was too little, too late. Gross output sums up the sales from all stages of production, resulting in the double-counting of intermediate stages. At an annualized $30.1-trillion (U.S.) in the fourth quarter of 2013, it’s nearly double the GDP figure of $17.1-trillion. Yet by focusing on production rather than consumption, it gives a supply-side picture that isn’t otherwise available.