G-4 Real GDP Growth

May 21, 2009

The table below documents annualized rates of real GDP contraction between the third quarter of 2008 and the first quarter of 2009 and for the four quarters to 1Q09.  These comparisons show a three-speed recession.  Japan has weakened most severely, and the United States had the mildest drop-off, if one can call drops of 6.2% annualized in the last two quarters and of 2.6% over the past four quarters mild.  In between, one finds Europe.  Real GDP in Britain and Euroland fell by more than 4.0% over the last statement year and collectively at a faster-than-7.0% pace between 3Q08 and 1Q09.  After such a devastating plunge, growth near to zero would represent significant improvement yet leave advanced economies still in very difficult circumstances.  Even though Euroland’s composite PMI rose to an 8-month high in May, the April-May average PMI reading of 42.5 was nine points lower than a year earlier.  The level of Japanese real GDP last quarter was the lowest in the 22 quarters since 3Q03.  With just three quarters remaining in the decade, U.S. growth has averaged 1.7% per annum.  That’s slightly less than half of the 3.6% per annum growth sustained during the second half of the 20th century and just 0.2 percentage points per annum better than the pace of Japanese growth in the 1990’s, often called that economy’s “lost decade.”

% per annum Japan Euroland U.K. U.S.
1Q09 vs 3Q08 -14.8% -8.0% -6.8% -6.2%
1Q09 vs 1Q08 -9.7% -4.6% -4.1% -2.6%

Copyright 2009 Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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