Weak First Quarter
August Unemployment Rate Steady

Solid Growth in Second Quarter

The second estimate of real GDP growth from the BEA and it confirms a strong rate of 4.2 percent.

GPD2014.II

The strong second quarter reinforces my view that the first quarter contraction (-2.1%) was largely due to a short run supply shock.  It seems like a long time ago now, but you probably remember just how cold that polar vortex was.

One last graphic.  This one is an update that shows how the path of real GDP is just not moving back to the long run trend prior to the Great Recession. 

GPDtrend2014.II

Something structural definitely happened during the Great Recession.  Aggregate demand declined, but long run aggregate supply must have too.