U.S. GDP Since Ground Zero

April 10, 2013

From an economic growth standpoint, the United States is the proverbial one-eyed man in the land of the blind.  Real GDP is in the fourth quarter of 2012 was 2.5% greater than its pre-Great Recession peak some five years earlier.  Similar comparisons for Japan, the euro area and Great Britain show net contractions of more than 2.0%.

But make no mistake, the U.S. economic performance is but a shadow of its historical norm. Real GDP grew 0.5% per annum in the five years between 4Q07 and 4Q12, 2.1% annualized over the first fourteen quarters of the current economic expansion and 1.8% per year in the two years between 4Q10 and 4Q12.  By comparison, GDP rose 2.4% per year over the seven years from the fourth quarter of 2000 to the fourth quarter of 2007 and 3.4% per year over the half century between the ends of 1950 and 2000.

The table below of annualized sequential growth since 2009 highlights another adverse characteristic of the present business cycle, which is the inability to sustain accelerating growth for as much as two consecutive quarters.  In just three of the past 14 quarters did GDP expand as much as 3%, and five of the quarters had growth of less than 2% and collectively averaging 0.9%.

  First Quarter 2nd Quarter 3rd Quarter 4th Quarter
2009 -5.3% -0.3% +1.4% +4.0%
2010 +2.3% +2.2% +2.6% +2.4%
2011 +0.1% +2.5% +1.3% +4.1%
2012 +2.0% +1.3% +3.1% +0.4%

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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