super informative article, thank you! I am trying to get to the 665B annlualized number but not sure how. I see wages and salaries in the Q2 GDP report for 11,108.4 (in billions). So do I need to come up with 10,441 (in billions) from CES establishment data somehow?

Suppose we had a firm with $100 in sales, and it reported $80 in expenses and $40 in profits. There would be a statistical discrepancy of $20 by which income exceeds sales.

It might be the case that the firm's measure of expenses includes $15 in bonuses that are not included in somebody else's measure of the firm's expenses. That is interesting, but I don't see how it explains the statistical discrepancy. Unless you are saying that the $15 in bonuses is exaggerated and that it will be revised away, so that expenses will turn out to be $65 and the statistical discrepancy will be reduced that way.

Amazingly comprehensive analysis of the discrepancies between GDP and GDI and thanks for your hard work!

Hi Joseph,

super informative article, thank you! I am trying to get to the 665B annlualized number but not sure how. I see wages and salaries in the Q2 GDP report for 11,108.4 (in billions). So do I need to come up with 10,441 (in billions) from CES establishment data somehow?

Help me understand.

Suppose we had a firm with $100 in sales, and it reported $80 in expenses and $40 in profits. There would be a statistical discrepancy of $20 by which income exceeds sales.

It might be the case that the firm's measure of expenses includes $15 in bonuses that are not included in somebody else's measure of the firm's expenses. That is interesting, but I don't see how it explains the statistical discrepancy. Unless you are saying that the $15 in bonuses is exaggerated and that it will be revised away, so that expenses will turn out to be $65 and the statistical discrepancy will be reduced that way.