You can believe today's GDP revision upwards to 3.3% growth for the second quarter to the extent that you accept that inflation is running at an annual rate of 1.2%, which is what was used for the deflator to calculate the GDP revision.
There is a profound mathematical relationship between higher GDP and the assumption of a lower rate of inflation.
In addition to the GDP figures, there are GDP deflators, which measure the change in prices in total GDP and for each component. Though the consumer price index is a more closely watched inflation indicator, the GDP deflator is another key inflation measure. Unlike CPI, it has the advantage of not being a fixed basket of goods and services, so that changes in consumption patterns or the introduction of new goods and services will be reflected in the deflator.In short, the government economists have a SIGNIFICANT amount of latitude to make the GDP deflator appear to be what they wish it to be, and thereby to make real GDP growth achieve whatever growth objectives that they feel people will need to see to believe that the government is doing a good job, and that all is well.
And oh by the way...
