The Real GDP numbers from BEA disappointed the market in an otherwise strong earnings season. Is this “Post Recession” actually stronger than the last two? Well, I guess that depends on how and when (in this case what quarter you start measuring). What about using leading indicators that turned in december 2008? I guess the average growth would have looked a lot worse (Q1 – 4.9, Q2 – 0,7 after last revisions). We conventionally use “positive gdp” as an post recession indicator and therefore Dr. Mark J. Perry starts in Q3 2009 – first quarter of positive growth after the crisis:
But how does GDP growth in this recovery (assuming the recovery started in third quarter of 2009) over the last four quarters (1.6%, 5%, 3.7% and 2.4%) compare to output growth in the four quarters following the last two recessions in 1990-1991 and 2001? Pretty good actually, see the graph above showing real GDP growth in the one-year periods (four quarters) following the last three recessions.
Sure, real GDP growth has slowed from 5% to 3.7% to 2.4% over the last three quarters, but following the 2001 recession real GDP slowed even more, from 3.5% to 2.1% to 2% to 0.1%. And looking at the average growth over the four quarters following the last three recessions, the average 3.18% real GDP growth over the last year was higher than the 1.93% following the 2001 recession and higher than the 2.63% following the 1990-1991 recession. Keep in mind that the economic recovery that started in 1991 was the longest (120 months) and strongest economic expansion in the history of the U.S.
- Read the post on Carpe Diem.
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