GDP

GDP news gets better yet

The third (and final) GDP estimate for the third quarter revised growth up yet again, this time to 4.1%.  This figure indicates that growth was stronger in the third quarter than at any time since the end of 2011. The graph below shows quarterly growth rates since 2003.
GPD2013.IIIc
Notice that 4.1% is larger than all but one quarter since before the Great Recession.  These are the kinds of growth rates we need if the economy is to truly recover from the Great Recession.  Finally, the revisions indicate that more of the growth came from consumption than previously thought.  The table below shows how each of the four categories of GDP spending contributed to overall growth. GDPTable2013.III

The takeaway:

  1. GDP growth in the third quarter was higher than all but one quarter since 2006.
  2. The new data shows greater growth in consumption.

GDP growth revised up to 3.6%

This week's GDP report, the second GDP estimate for the 2013 third quarter, brings good news, though perhaps not as good as it seems.  The report revised the growth rate up to 3.6% (the first estimate was 2.8%).  Quarterly growth data since 2003 is graphed below.

GDP2013-3b
There is nothing wrong with 3.6%.  After all, that is the best single quarter since the end of 2011.  On the other hand, the big growth came to business inventories which contributed almost half of the GDP growth of the period (1.68 of the 3.6%). 

Here is the breakdown of the contributions from the four major components of GDP:

  • Consumption: +0.96%
  • Investment: +2.49%
  • Government: +0.09%
  • Net Exports: +0.07%

Remember that private inventory is part of investment.

 


Real GDP up 2.8% in Third Quarter

Real GDP grew at 2.8% in the third quarter of 2013, according to the advance estimate released today by the BEA.  This growth rate is very close to the long-run average growth rate for U.S. real GDP, which is 3%.  The graphic below plots quarterly GDP growth rates since 2003.

GPD2013.III

If this number holds up, it is the strongest growth the U.S. economy has had since the first quarter of 2012.  Keep in mind, this is the first estimate (also known as the advance estimate), and will be revised twice over the next two months. 

 


Sluggish GDP Growth for First Quarter

Today, the Bureau of Economic Analysis released the third and final GDP estimate for the first quarter of 2013.  The estimate of real GDP growth is 1.78%, which is positive. However, it is still well below the 3% historical average (based on the past 50 years).

The first figure below shows the quarterly growth rates for real GDP since 2003.  Since the Great Recession, real GDP growth rates have been relatively low, especially considering the economy is technically in recovery mode.

Graph1

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