If Non-Market Household Production Has Increased, Official GDP Stats Overstate Economic Contraction
Home construction is way down in the United States, but home production — work to produce goods and services for our own consumption — is way up. As people forgo expensive restaurant meals, they spend more time cooking at home. A Time Magazine poll reports that individuals are doing more housework and home repairs. Many Americans, famously including Michelle Obama, are planting vegetable gardens. Even some urbanites are raising chickens in their backyards.
Nancy Folbre, writing in the NY Times Economix blog, makes a good point: Adjusted for the increase in household production over the last six months or longer, the -6% contractions in real GDP over the last two quarters might overstate the severity of the contraction. That is, household production (cooking at home, home repairs, gardening, etc.) is NOT counted as part of official GDP output statistics because it is not market-based production. To the extent that Americans have increased household production in response to the economic slowdown, the BEA's official GDP statistics have overstated the true amount of economic contraction.