GDPplus or GDP Better Than GDI?

The Federal Reserve Bank of Philadelphia introduced GDPPlus in 2013 as an enhanced measure of GDP that incorporates both GDP (expenditure-side) and GDI (income-side) data. Unlike the National Bureau of Economic Research’s (NBER) method which averages GDP and GDI, GDPPlus optimally extracts data from both, aiming to represent unobserved U.S. economic activity. Although GDP is widely used, some studies suggest that GDI might be a superior metric in certain contexts. However, blending both GDP and GDI could provide a more accurate estimate than using either metric alone. Recent data indicates potential discrepancies between GDP measurements and signs of recession, raising questions about the true health of the economy.