Ignore GDP: This Is the Obscure Stat That Explains the Hot Recovery

Matthew O’Brien

The recovery is real, even if it’s not spectacular, and Gross Domestic Income explains why.

Something odd has happened the past few months. The job numbers tell us the recovery is accelerating. The GDP numbers say it’s not. This discrepancy has confounded expectations because there’s usually a fairly stable relationship between the GDP and employment — economists call it Okun’s Law. The growth-and-jobs gap has since launched a thousand blog posts.

But it turns out there might not be a gap, after all. Today we received news that GDI grew at a gangbusters rate in the fourth quarter of 2011. Bye-bye, growth-and-jobs gap.

What the heck is GDI?

Read the rest here.