The value of goods and services produced in Hawaii or gross domestic product (GDP) declined at an annual rate of 42% in the second quarter of 2020, and in December data will be released on the extent of the rebound that occurred over the summer.
However, according to a new university of Hawaii Economic Research Organization (UHERO) article, economists need to analyze more than just Hawaiiit’s real GDP to understand the current economic situation. This is because the state GDP data is released with a three-month lag and undergoes numerous revisions after release. Experts said that with the rapidly changing economic landscape caused by COVID-19, most traditional data sources are not timely enough.
Carl Bonham, UHERO Executive Director and Professor of Economics and Pierre Fulek, UHERO research economist and associate professor of economics, illustrated that in March and April 2020, when UHERO was trying to calculate potential job losses in the state, preliminary data on the number of jobs by industry for February was available, but no data existed for March or April. UHERO relied on data on the number of initial jobless claims and survey data conducted with the Hawaii Chamber of Commerce to issue projections. But incoming data led to an overestimate of the number of jobs lost in April. This example exposes discrepancies that warn against placing too much faith in an individual data set.
In addition to using data published by government agencies, UHERO began incorporating data from private sources into its forecasts. Although private data is often in a relatively raw form with missing data points, it is usually not reviewed. Unlike carefully designed public surveys, there is no guarantee that later data points will be compatible with earlier ones. However, if private data is available at a high frequency and with a short time to release, the advantage of timely information may outweigh the disadvantages. For example, the weekly UHERO Economic Pulse Index uses data collected by government agencies and private sources to assess the current economic landscape.
the UHERO The Economic Pulse Index is an experimental measure of economic conditions. It summarizes information from a variety of indicators, the number of which may change as more data sources become available. Experts will analyze the index’s effectiveness in predicting the state’s overall economy when the state GDP for the third quarter is published in December 2020.
UHERO is housed at the College of Social Sciences.
Learn more about UHEROthe website of.