The Bureau of Economic Analysis announced today that U.S. real GDP grew at a 2.3% annual rate in the second quarter. You can't describe the new data as favorable, but I'm still hopeful about what comes next.
U.S. real GDP growth at an annual rate, 1947:Q2-2015:Q2, historical average rate (3.1%), and average since 2009:Q3 (2.1%).
GDP growth since the end of the Great Recession in 2009:Q2 has averaged 2.1% per year, a full percentage point below the average over the entire 1947-2015 period. And that 3.1% includes both recessions and expansions. Moreover, the benchmark revision of the last three years of data that accompanied today's report didn't help. Although the new data revise the weak numbers for the first quarters of 2015 and 2014 up a bit, the BEA now estimates that annual GDP growth averaged 1.9% (logarithmically) over 2012:Q1-2015:Q1, down 0.3% from the 2.2% that had initially been reported for that period. Jason Furman attributes much of the downward revision to “a new methodology for calculating the price of financial services spending and revisions to source data on services.” In any case, the bottom line is that the post-2009 expansion, which we already knew was very weak by historical standards, now appears to have been even weaker.
Real GDP growth at an annual rate as reported on April 29 and July 30.
The recent weakness has brought the Econbrowser Recession Indicator Index up to 13.3%. The index has now shown a modest spike up with each of the last three weak winters. The index uses today's data release to form a picture of where the economy stood as of the end of 2015:Q1.
GDP-based recession indicator index. The plotted value for each date is based solely on information as it would have been publicly available and reported as of one quarter after the indicated date, with 2015:Q1 the last date shown on the graph. Shaded regions represent the NBER's dates for recessions, which dates were not used in any way in constructing the index, and which were sometimes not reported until two years after the date.
