Gross domestic income, an alternative to gross domestic product as a measure of output, points to a stall instead of a recession

See A Different Take on the U.S. Economy: Maybe It Isn’t Really Shrinking by Jon Hilsenrath of The WSJ. Excerpts: Excerpts: 

"When the Commerce Department reported last month that U.S. economic output contracted for two consecutive quarters during the first half of the year, it raised fears the U.S. might be in recession, defined in a popular rule of thumb as two negative quarters of growth. New data sends a different message: rather than in recession, the economy might be in something closer to a stall.

Economic output can be measured two different ways: gross domestic product, or gross domestic income. For every dollar an individual spends to buy some good or service—a restaurant meal, a car, a doctor’s visit—another individual earns a dollar of income to make and deliver that good or service. GDP captures the spending side of these transactions, GDI the income side.

In theory, GDI and GDP should equal each other, though there is always some statistical discrepancy because they are measured using different data sets and different sources. This year the discrepancy has been unusually large. During the first half of the year GDP contracted at a 1.1% annual rate, adjusted for inflation. At the same time, GDI, made up of a measure of corporate profits, wages and benefits, self-employment income, interest and rent, expanded at a 1.6% annual rate, the Commerce Department reported Thursday."

"Some economists look for a clearer picture by averaging GDP and GDI. That measure of output barely moved at all, rising at a 0.2% annual rate, adjusted for inflation, over the first six months of the year. This is more consistent with a stalling economy than one in recession.

“The economy is stagnating, but it’s not declining,” said Robert Gordon, a Northwestern University professor and longstanding member of a committee at the National Bureau of Economic Research, which dates the beginning and end of recessions."

"Some studies have shown that GDI might be a more reliable real-time gauge of activity than GDP. In a 2010 study, Jeremy Nalewaik, then a Federal Reserve economist, found that GDP tended to be revised toward income measures over time. If this year follows the pattern, the GDP contraction might be revised away in the years ahead."