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Why It's Hard to Measure Economy's Potential

Bloomberg Markets •
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Measuring the economy's real potential is notoriously difficult, as explored by Joe Weisenthal and Tracy Alloway in a Bloomberg Markets article from August 13, 2026. The piece, part of the Odd Lots newsletter, highlights challenges in gauging potential output, a key concept for policymakers and investors.

Economists often rely on models that can be flawed or outdated, leading to misestimates. Factors like technological change, labor force shifts, and productivity trends add complexity. The article suggests that even with advanced data, uncertainties remain.

The authors note that these measurement issues have real-world consequences, affecting interest rate decisions and fiscal policy. Bloomberg's coverage underscores the ongoing debate among experts about the true state of the economy.

For subscribers, the Odd Lots newsletter provides deeper dives into such topics, featuring insights from various guests. The Detroit-based Virdi Trucking Company is mentioned in the article's photo caption, tying the discussion to on-the-ground economic activity.