Contraction of United States GDP at 32.9
Percent SAAR in First Quarter 2020 in the Global Recession, with Output in
the US Reaching a High in Feb 2020 (https://www.nber.org/cycles.html), in the Lockdown
of Economic Activity in the COVID-19 Event, Mediocre Cyclical United States
Growth in the Lost Economic Cycle of the Global Recession with Economic Growth
Underperforming Below Trend Worldwide, Contraction of Real Private Fixed
Investment at 29.9 Percent SAAR, United States Terms of Trade, Beginning
Recovery in United States New House Sales, United States House Prices, World
Cyclical Slow Growth, and Government Intervention in Globalization: Part I
Carlos M. Pelaez
© Carlos M. Pelaez, 2009,
2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020.
IA Mediocre
Cyclical United States Economic Growth
IID United States Terms of International Trade
IIA United States
Housing Collapse
IIA1 Sales of New Houses
IIA2
United States House Prices
III World Financial Turbulence
IV Global Inflation
V World Economic
Slowdown
VA United States
VB Japan
VC China
VD Euro Area
VE Germany
VF France
VG Italy
VH United Kingdom
VI Valuation of Risk Financial
Assets
VII Economic Indicators
VIII Interest Rates
IX Conclusion
References
Appendixes
Appendix I The Great Inflation
IIIB Appendix on Safe
Haven Currencies
IIIC Appendix on
Fiscal Compact
IIID Appendix on
European Central Bank Large Scale Lender of Last Resort
IIIG Appendix on Deficit Financing of Growth and the
Debt Crisis
The revisions and enhancements of United
States GDP and personal income accounts by the Bureau of Economic Analysis
(BEA) (http://bea.gov/iTable/index_nipa.cfm) also
provide critical information in assessing the current rhythm of US economic
growth. The economy appears to be moving at a pace around 1.2 percent per year.
Table Summary GDP provides the data.
- Average Annual Growth in
the Past Thirty-Three Quarters. GDP growth in the four quarters of 2012, the four
quarters of 2013, the four quarters of 2014, the four quarters of 2015,
the four quarters of 2016, the four quarters of 2017, the four quarters of
2018, the four quarters of 2019 and the two quarters of 2020 accumulated
to 7.5 percent. This growth is equivalent to 0.9 percent per year,
obtained by dividing GDP in IIQ2020 of $17,205.8 billion by GDP in IVQ2011
of $16,004.1 billion and compounding by 4/34: {[($17,205.8/$16,004.1)4/34
-1]100 = 0.9 percent}.
- Average Annual Growth in
the Past Four Quarters. GDP growth in the four quarters from IQ2019 to IIQ2020
accumulated to minus 9.5 percent that is equivalent to minus 32.9 percent
in a year. This is obtained by dividing GDP in IIQ2020 of $17,205.8 billion
by GDP in IIQ2019 of $19,020.6 billion and compounding by 4/4: {[($17,205.8/$19,020.6)4/4
-1]100 = -9.5%}. The US economy decreased 9.5 percent in IIQ2020 relative
to the same quarter a year earlier in IIQ2019 (See Table 6 at https://www.bea.gov/sites/default/files/2020-07/gdp2q20_adv.pdf and the complete data
at https://apps.bea.gov/iTable/index_nipa.cfm). Growth was at annual
equivalent 5.5 percent in IIQ2014 and 5.0 percent IIIQ2014 and only at 2.3
percent in IVQ2014. GDP grew at annual equivalent 3.8 percent in IQ2015, 2.7
percent in IIQ2015, 1.5 percent in IIIQ2015 and 0.6 percent in IVQ2015.
GDP grew at annual equivalent 2.3 percent in IQ2016 and at 1.3 percent annual
equivalent in IIQ2016. GDP increased at 2.2 percent annual equivalent in
IIIQ2016 and at 2.5 percent in IVQ2016. GDP grew at annual equivalent 2.3
percent in IQ2017 and at annual equivalent 1.7 percent in IIQ2017. GDP
grew at annual equivalent 2.9 percent in IIIQ2017. GDP grew at annual
equivalent 3.9 percent in IVQ2017. GDP grew at annual equivalent 3.8
percent in IQ2018, increasing at 2.7 percent annual equivalent in IIQ2018.
GDP grew at annual equivalent 2.1 percent in IIIQ2018 and at 1.3 percent
in IVQ2018. GDP grew at annual equivalent 2.9 percent in IQ2019 and at
annual equivalent 1.5 percent in IIQ2019. GDP grew at annual equivalent 2.6
percent in IIIQ2019 and at 2.4 percent annual equivalent in IVQ2019.
Growth was at annual equivalent minus 5.0 percent in IQ2020. Growth was at
annual equivalent minus 32.9 percent in IIQ2020. Another important
revelation of the revisions and enhancements is that GDP was flat at 0.1
in IVQ2012, which is in the borderline of contraction, and negative in
IQ2014. US GDP fell 0.3 percent in IQ2014. The rate of growth of GDP in
the revision of IIIQ2013 is 3.2 percent in seasonally adjusted annual rate
(SAAR).
|
|
Real GDP, Billions Chained 2012 Dollars
|
∆% Relative to IVQ2007
|
∆% Relative to Prior Quarter
|
∆%
over Year Earlier |
|
IVQ2007
|
15,762.0
|
NA
|
0.6
|
2.0
|
|
IVQ2011
|
16,004.1
|
1.5
|
1.2
|
1.6
|
|
IQ2012
|
16,129.5
|
2.3
|
0.8
|
2.7
|
|
IIQ2012
|
16,198.8
|
2.8
|
0.4
|
2.4
|
|
IIIQ2012
|
16,220.7
|
2.9
|
0.1
|
2.5
|
|
IVQ2012
|
16,239.1
|
3.0
|
0.1
|
1.5
|
|
IQ2013
|
16,383.0
|
3.9
|
0.9
|
1.6
|
|
IIQ2013
|
16,403.2
|
4.1
|
0.1
|
1.3
|
|
IIIQ2013
|
16,531.7
|
4.9
|
0.8
|
1.9
|
|
IVQ2013
|
16,663.6
|
5.7
|
0.8
|
2.6
|
|
IQ2014
|
16,616.5
|
5.4
|
-0.3
|
1.4
|
|
IIQ2014
|
16,841.5
|
6.8
|
1.4
|
2.7
|
|
IIIQ2014
|
17,047.1
|
8.2
|
1.2
|
3.1
|
|
IVQ2014
|
17,143.0
|
8.8
|
0.6
|
2.9
|
|
IQ2015
|
17,305.8
|
9.8
|
0.9
|
4.1
|
|
IIQ2015
|
17,422.8
|
10.5
|
0.7
|
3.5
|
|
IIIQ2015
|
17,486.0
|
10.9
|
0.4
|
2.6
|
|
IVQ2015
|
17,514.1
|
11.1
|
0.2
|
2.2
|
|
IQ2016
|
17,613.3
|
11.7
|
0.6
|
1.8
|
|
IIQ2016
|
17,668.2
|
12.1
|
0.3
|
1.4
|
|
IIIQ2016
|
17,764.4
|
12.7
|
0.5
|
1.6
|
|
IVQ2016
|
17,876.2
|
13.4
|
0.6
|
2.1
|
|
IQ2017
|
17,977.3
|
14.1
|
0.6
|
2.1
|
|
IIQ2017
|
18,054.1
|
14.5
|
0.4
|
2.2
|
|
IIIQ2017
|
18,185.6
|
15.4
|
0.7
|
2.4
|
|
IVQ2017
|
18,359.4
|
16.5
|
1.0
|
2.7
|
|
IQ2018
|
18,530.5
|
17.6
|
0.9
|
3.1
|
|
IIQ2018
|
18,654.4
|
18.4
|
0.7
|
3.3
|
|
IIIQ2018
|
18,752.4
|
19.0
|
0.5
|
3.1
|
|
IVQ2018
|
18,813.9
|
19.4
|
0.3
|
2.5
|
|
IQ2019
|
18,950.3
|
20.2
|
0.7
|
2.3
|
|
IIQ2019
|
19,020.6
|
20.7
|
0.4
|
2.0
|
|
IIIQ2019
|
19,141.7
|
21.4
|
0.6
|
2.1
|
|
IVQ2019
|
19,254.0
|
22.2
|
0.6
|
2.3
|
|
IQ2020
|
19,010.8
|
20.6
|
-1.3
|
0.3
|
|
IIQ2020
|
17,205.8
|
9.2
|
-9.5
|
-9.5
|
|
Cumulative ∆% IQ2012 to IIQ2020
|
7.5
|
|
|
|
|
Annual Equivalent ∆%
|
0.9
|
|
|
Table I-5 shows
the mediocre average annual equivalent growth rate of 1.2 percent of the US
economy in the forty-four quarters of the current cyclical expansion from
IIIQ2009 to IIQ2020. There is sharp contraction in IIQ2020 at SAAR of minus 32.9
percent in the global recession with output in the US reaching a high
in Feb 2020 (https://www.nber.org/cycles.html), in the
lockdown of economic activity in the COVID-19 event. In sharp contrast, the average growth rate of
GDP was:
- 5.7 percent in the first thirteen quarters of expansion
from IQ1983 to IQ1986
- 5.3 percent in the first fifteen quarters of expansion from
IQ1983 to IIIQ1986
- 5.1 percent in the first sixteen quarters of expansion from
IQ1983 to IVQ1986
- 5.0 percent in the first seventeen quarters of expansion
from IQ1983 to IQ1987
- 5.0 percent in the first eighteen quarters of expansion
from IQ1983 to IIQ1987
- 4.9 percent in the first nineteen quarters of expansion
from IQ1983 to IIIQ1987
- 5.0 percent in the first twenty quarters of expansion from
IQ1983 to IVQ1987
- 4.9 percent in the first twenty-first quarters of expansion
from IQ1983 to IQ1988
- 4.9 percent in the first twenty-two quarters of expansion
from IQ1983 to IIQ1988
- 4.8 percent in the first twenty-three quarters of expansion
from IQ1983 to IIIQ1988
- 4.8 percent in the first twenty-four quarters of expansion
from IQ1983 to IVQ1988
- 4.8 percent in the first twenty-five quarters of expansion
from IQ1983 to IQ1989
- 4.7 percent in the first twenty-six quarters of expansion
from IQ1983 to IIQ1989
- 4.6 percent in the first twenty-seven quarters of expansion
from IQ1983 to IIIQ1989
- 4.5 percent in the first twenty-eight quarters of expansion
from IQ1983 to IVQ1989
- 4.5 percent in the first twenty-nine quarters of expansion
from IQ1983 to IQ1990
- 4.4 percent in the first thirty quarters of expansion from
IQ1983 to IIQ1990
- 4.3 percent in the first thirty-one quarters of expansion
from IQ1983 to IIIQ1990
- 4.0 percent in the first thirty-two quarters of expansion
from IQ1983 to IVQ1990
- 3.8 percent in the first thirty-three quarters of expansion
from IQ1983 to IQ1991
- 3.8
percent in the first thirty-four quarters of expansion from IQ1983 to IIQ1991
- 3.8
percent in the first thirty-five quarters of expansion from IQ1983 to
IIIQ1991
- 3.7
percent in the thirty-six quarters of expansion from IQ1983 to IVQ1991
- 3.7
percent in the thirty-seven quarters of expansion from IQ1983 to IQ1992
- 3.7
percent in the thirty-eight quarters of expansion from IQ1983 to IIQ1992
- 3.7
percent in the thirty-nine quarters of expansion from IQ1983 to IIIQ1992
- 3.8
percent in the forty quarters of expansion from IQ1983 to IVQ1992
- 3.7
percent in the forty-one quarters from IQ1983 to IQ1993
- 3.6
percent in the forty-two quarters from IQ1983 to IIQ1993
- 3.6
percent in the forty-three quarters from IQ1983 to IIIQ1993
- 3.7
percent in the forty-four quarters from IQ1983 to IVQ1993
The line
“average first four quarters in four expansions” provides the average growth
rate of 7.7 percent with 7.8 percent from IIIQ1954 to IIQ1955, 9.2 percent from
IIIQ1958 to IIQ1959, 6.1 percent from IIIQ1975 to IIQ1976 and 7.9 percent from
IQ1983 to IVQ1983. The United States missed this opportunity of high growth in
the initial phase of recovery. BEA data show the US economy in standstill
relative to historical experience with annual growth of 2.6 percent in 2010
decelerating to 1.6 percent annual growth in 2011, 2.2 percent in 2012, 1.8
percent in 2013, 2.5 percent in 2014, 3.1 percent in 2015, 1.7 percent in 2016,
2.3 percent in 2017, 3.0 percent in 2018 and 2.2 percent in 2019 (http://www.bea.gov/iTable/index_nipa.cfm). The
expansion from IQ1983 to IQ1986 was at the average annual growth rate of 5.7
percent, 5.1 percent from IQ1983 to IVQ1986, 4.9 percent from IQ1983 to
IIIQ1987, 5.0 percent from IQ1983 to IVQ1987, 4.9 percent from IQ1983 to
IQ1988, 4.9 percent from IQ1983 to IIQ1988, 4.8 percent from IQ1983 to
IIIQ1988. 4.8 percent from IQ1983 to IVQ1988, 4.8 percent from IQ1983 to
IQ1989, 4.7 percent from IQ1983 to IIQ1989, 4.6 percent from IQ1983 to
IIIQ1989. 4.5 percent from IQ1983 to IVQ1989, 4.5 percent from IQ1983 to
IQ1990, 4.4 percent from IQ1983 to IIQ1990, 4.3 percent from IQ1983 to
IIIQ1990. 4.0 percent from IQ1983 to IVQ1990. 3.8 percent from IQ1983 to
IQ1991, 3.8 percent from IQ1983 to IIQ1991, 3.8 percent from IQ1983 to
IIIQ1991. 3.7 percent from IQ1983 to IVQ1991, 3.7 percent from IQ1983 to
IQ1992, 3.7 percent from IQ1983 to IIQ1992, 3.7 percent from IQ1983 to
IIIQ1992, 3.8 percent from IQ1983 to IVQ1992, 3.7 percent from IQ1983 to IQ1993.
3.6 percent from IQ1983 to IIQ1993. 3.6 percent from IQ1983 to IIIQ1993, 3.7
percent from IQ1983 to IVQ1993 and at 7.9 percent from IQ1983 to IVQ1983. The
National Bureau of Economic Research (NBER) dates a contraction of the US from
IQ1990 (Jul) to IQ1991 (Mar) (https://www.nber.org/cycles.html). The
expansion lasted until another contraction beginning in IQ2001 (Mar). US GDP
contracted 1.3 percent from the pre-recession peak of $8983.9 billion of
chained 2009 dollars in IIIQ1990 to the trough of $8865.6 billion in IQ1991 (https://apps.bea.gov/iTable/index_nipa.cfm). GDP grew 2.8
percent in the first four quarters of the expansion from IIIQ2009 to IIQ2010. GDP growth
in the thirty-four quarters from IQ2012 to IIQ2020 accumulated to 18.6 percent.
This growth is equivalent to 0.9 percent per year, obtained by dividing GDP in
IIQ2020 of $17,205.8 billion by GDP in IVQ2011 of $16,004.1 billion and compounding
by 4/34: {[($17,205.8/$16,004.1)4/34 -1]100 = 0.9 percent}.
Table I-5, US,
Number of Quarters, Cumulative Growth and Average Annual Equivalent Growth Rate
in Cyclical Expansions
|
|
Number
of Quarters |
Cumulative
Growth
∆%
|
Average
Annual Equivalent Growth Rate
|
|
IIIQ 1954 to
IQ1957
|
11
|
12.8
|
4.5
|
|
First Four Quarters
IIIQ1954 to IIQ1955
|
4
|
7.8
|
|
|
IIQ1958 to
IIQ1959
|
5
|
10.0
|
7.9
|
|
First Four
Quarters
IIIQ1958 to
IIQ1959
|
4
|
9.2
|
|
|
IIQ1975 to
IVQ1976
|
8
|
8.3
|
4.1
|
|
First Four
Quarters IIIQ1975 to IIQ1976
|
4
|
6.1
|
|
|
IQ1983-IQ1986
IQ1983-IIIQ1986
IQ1983-IVQ1986
IQ1983-IQ1987
IQ1983-IIQ1987
IQ1983 to
IIIQ1987
IQ1983 to
IVQ1987
IQ1983 to
IQ1988
IQ1983 to
IIQ1988
IQ1983 to
IIIQ1988
IQ1983 to
IVQ1988
IQ1983 to
IQ1989
IQ1983 to
IIQ1989
IQ1983 to
IIIQ1989
IQ1983 to
IVQ1989
IQ1983 to
IQ1990
IQ1983 to IIQ1990
IQ1983 to
IIIQ1990
IQ1983 to
IVQ1990
IQ1983 to
IQ1991
IQ1983 to
IIQ1991
IQ1983 to
IIIQ1991
IQ1983 to
IVQ1991
IQ1983 to
IQ1992
IQ1983 to
IIQ1992
IQ1983 to
IIIQ1992
IQ1983 to
IVQ1992
IQ1983 to
IQ1993
IQ1983 to
IIQ1993
IQ1983 to
IIIQ1993
IQ1983 to IVQ1993
|
13
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
|
19.8
21.5
22.1
23.0
24.4
25.4
27.6
28.3
29.9
30.7
32.5
33.8
34.8
35.8
36.1
37.6
38.1
38.2
36.9
36.3
37.3
38.0
38.5
40.2
41.7
43.1
44.6
44.8
45.7
46.4
48.3
|
5.7
5.3
5.1
5.0
5.0
4.9
5.0
4.9
4.9
4.8
4.8
4.8
4.7
4.6
4.5
4.5
4.4
4.3
4.0
3.8
3.8
3.8
3.7
3.7
3.7
3.7
3.8
3.7
3.6
3.6
3.7
|
|
First Four
Quarters IQ1983 to IVQ1983
|
4
|
7.9
|
|
|
Average First
Four Quarters in Four Expansions*
|
|
7.7
|
|
|
IIIQ2009 to IIQ2020
|
44
|
13.7
|
1.2
|
|
First Four
Quarters IIIQ2009 to IIQ2010
|
|
2.8
|
|
*First Four
Quarters: 7.8% IIIQ1954-IIQ1955; 9.2% IIIQ1958-IIQ1959; 6.1% IIIQ1975-IQ1976;
7.8% IQ1983-IVQ1983
As shown in
Tables I-4 and I-5 above the loss of real GDP in the US during the contraction
was 4.0 percent but the gain in the cyclical expansion has been only 13.7
percent (first to the last row in Table I-5), using all latest revisions. As a
result, the level of real GDP in IIQ2020 with the second estimate and revisions
is higher by only 9.2 percent than the level of real GDP in IVQ2007. The US
maintained growth at 3.0 percent on average over entire cycles with expansions
at higher rates compensating for contractions. Growth at trend in the entire
cycle from IVQ2007 to IIQ2020 and in the global recession with output in the US
reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the
lockdown of economic activity in the COVID-19 event would have accumulated to 44.7
percent. GDP in IIQ2020 would be $22,807.6 billion (in constant dollars of
2012) if the US had grown at trend, which is higher by $5601.8 billion than
actual $17,205.8 billion. There are more than five trillion dollars of GDP less
than at trend, explaining the 41.3 million unemployed or underemployed
equivalent to actual unemployment/underemployment of 23.9 percent of the
effective labor force with the largest part originating in the global recession
with output in the US reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the
lockdown of economic activity in the COVID-19 event (https://cmpassocregulationblog.blogspot.com/2020/07/increase-of-total-nonfarm-payroll-jobs.html and earlier https://cmpassocregulationblog.blogspot.com/2020/06/creation-of-three-million-private.html). Unemployment is decreasing while employment is increasing in
initial adjustment of the lockdown of economic activity in the global recession
resulting from the COVID-19 event (https://www.bls.gov/cps/employment-situation-covid19-faq-june-2020.pdf). US GDP in IQ2020 is 24.6 percent lower than at trend. US GDP
grew from $15,762.0 billion in IVQ2007 in constant dollars to $17,205.8
billion in IQ2020 or 9.2 percent at the average annual equivalent rate of 0.7
percent. Professor John H. Cochrane (2014Jul2) estimates US GDP at more than 10
percent below trend. Cochrane (2016May02) measures GDP growth in the US at
average 3.5 percent per year from 1950 to 2000 and only at 1.76 percent per
year from 2000 to 2015 with only at 2.0 percent annual equivalent in the
current expansion. Cochrane (2016May02) proposes drastic changes in regulation
and legal obstacles to private economic activity. The US missed the opportunity
to grow at higher rates during the expansion and it is difficult to catch up
because growth rates in the final periods of expansions tend to decline. The US
missed the opportunity for recovery of output and employment always afforded in
the first four quarters of expansion from recessions. Zero interest rates and
quantitative easing were not required or present in successful cyclical
expansions and in secular economic growth at 3.0 percent per year and 2.0
percent per capita as measured by Lucas (2011May). There is cyclical uncommonly slow growth in the
US instead of allegations of secular
stagnation. There is similar behavior in manufacturing. There is classic
research on analyzing deviations of output from trend (see for example Schumpeter
1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977). The long-term trend is
growth of manufacturing at average 2.9 percent per year from Jun 1919 to Jun 2020.
Growth at 2.9 percent per year would raise the NSA index of manufacturing
output (SIC, Standard Industrial Classification) from 108.2987 in Dec 2007 to
154.8159 in Jun 2020. The actual index NSA in Jun 2020 is 95.097 which is 38.6
percent below trend. The underperformance of manufacturing in Jun 2020
originates partly in the earlier global recession augmented by the current
global recession with output in the US reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the
lockdown of economic activity in the COVID-19. Manufacturing grew at the
average annual rate of 3.3 percent between Dec 1986 and Dec 2006. Growth at 3.3
percent per year would raise the NSA index of manufacturing output (SIC, Standard
Industrial Classification) from 108.2987 in Dec 2007 to 162.5089 in Jun 2020.
The actual index NSA in Jun 2020 is 95.0970, which is 41.5 percent below trend.
Manufacturing output grew at average 1.6 percent between Dec 1986 and Jun 2020.
Using trend growth of 1.6 percent per year, the index would increase to
132.0671 in Jun 2020. The output of manufacturing at 95.0970 in Jun 2020 is
28.0 percent below trend under this alternative calculation. Using the NAICS (North American Industry Classification System),
manufacturing output fell from the high of 110.5147 in Jun 2007 to the low of
86.3800 in Apr 2009 or 21.8 percent. The NAICS manufacturing index increased
from 86.3800 in Apr 2009 to 96.1857 in Jun 2020 or 11.4 percent. The NAICS
manufacturing index increased at the annual equivalent rate of 3.5 percent from
Dec 1986 to Dec 2006. Growth at 3.5 percent would increase the NAICS
manufacturing output index from 106.6777 in Dec 2007 to 163.9940 in Jun 2020.
The NAICS index at 96.1857 in Jun 2020 is 41.3 below trend. The NAICS
manufacturing output index grew at 1.7 percent annual equivalent from Dec 1999
to Dec 2006. Growth at 1.7 percent would raise the NAICS manufacturing output
index from 106.6777 in Dec 2007 to 131.6999 in Jun 2020. The NAICS index at 96.1857
in Jun 2020 is 27.0 percent below trend under this alternative calculation.
Table I-6 shows
that the contraction concentrated in two quarters: decline of 2.2 percent in
IVQ2008 relative to the prior quarter and decline of 1.1 percent in IQ2009 relative
to IVQ2008. The combined fall of GDP in IVQ2008 and IQ2009 was 3.3 percent
{[(1-0.022) x (1-0.011) -1]100 = -3.3%}, or {[(IQ2009 $15,155.9)/(IIIQ2008
$15,677.0) – 1]100 = -3.3%} except for rounding. Those two quarters coincided
with the worst effects of the financial crisis (Cochrane and Zingales 2009).
GDP fell 0.1 percent in IIQ2009 but grew 0.4 percent in IIIQ2009, which is the
beginning of recovery in the cyclical dates of the NBER. Most of the recovery
occurred in five successive quarters from IVQ2009 to IVQ2010 of growth of 1.1
percent in IVQ2009, 0.4 percent in IQ2010, 0.9 percent in IIQ2010 and nearly
equal growth at 0.7 percent in IIIQ2010 and 0.5 percent in IVQ2010 for
cumulative growth in those five quarters of 3.8 percent, obtained by accumulating
the quarterly rates {[(1.011 x 1.004 x 1.009 x 1.007 x 1.005) – 1]100 = 3.7%}
or {[(IVQ2010 $15,750.6)/(IIIQ2009 $15,189.2) – 1]100 = 3.7%} with minor
rounding difference. The economy then stalled during the first half of 2011
with decline of 0.2 percent in IQ2011 and growth of 0.7 percent in IIQ2011 for
combined annual equivalent rate of 1.0 percent {(0.998 x 1.007)2}.
The economy grew 0.0 percent in IIIQ2011 for annual equivalent growth of 0.0
percent in the first three quarters {[(0.998 x 1.007 x 1.00)4/3
-1]100 = 0.7%}. Growth picked up in IVQ2011 with 1.2 percent relative to
IIIQ2011. Growth in a quarter relative to a year earlier in Table I-6 slows
from over 2.6 percent during three consecutive quarters from IIQ2010 to IVQ2010
to 1.9 percent in IQ2011, 1.7 percent in IIQ2011, 0.9 percent in IIIQ2011 and
1.6 percent in IVQ2011. As shown below, growth of 1.2 percent in IVQ2011 was
partly driven by inventory accumulation. In IQ2012, GDP grew 0.8 percent
relative to IVQ2011 and 2.7 percent relative to IQ2011, decelerating to 0.4
percent in IIQ2012 and 2.4 percent relative to IIQ2011 and 0.1 percent in
IIIQ2012 and 2.5 percent relative to IIIQ2011. Growth was 0.1 percent in
IVQ2012 with 1.5 percent relative to a year earlier but mostly because of deduction
of 1.70 percentage points of inventory divestment and 0.63 percentage points of
reduction of one-time national defense expenditures. Growth was 0.9 percent in
IQ2013 and 1.6 percent relative to IQ2012 in large part because of burning
savings to consume caused by financial repression of zero interest rates. There
is similar growth of 0.1 percent in IIQ2013 and 1.3 percent relative to a year
earlier. In IIIQ2013, GDP grew 0.8 percent relative to the prior quarter and
1.9 percent relative to the same quarter a year earlier with inventory
accumulation contributing 1.48 percentage points to growth at 3.2 percent SAAR
in IIIQ2013. GDP increased 0.8 percent in IVQ2013 and 2.6 percent relative to a
year earlier. GDP fell 0.3 percent in IQ2014 and grew 1.4 percent relative to a
year earlier. Inventory divestment deducted 1.40 percentage points from GDP
growth in IQ2014. GDP grew 1.4 percent in IIQ2014, 2.7 percent relative to a
year earlier and at 5.5 SAAR with inventory change contributing 1.05 percentage
points. GDP grew 1.2 percent in IIIQ2014 and 3.1 percent relative to a year
earlier. GDP grew 0.6 percent in IVQ2014 and 2.9 percent relative to a year
earlier. GDP increased 0.9 percent in IQ2015 and increased 4.1 percent relative
to a year earlier partly because of low level during contraction of 0.3 percent
in IQ2014. GDP grew 0.7 percent in IIQ2015 and 3.4 percent relative to a year
earlier. GDP grew 0.4 percent in IIIQ2015 and 2.6 percent relative to a year
earlier. GDP increased 0.2 percent in IVQ2015 and increased 2.2 percent
relative to a year earlier. GDP grew 0.6 percent in IQ2016 and increased 1.8
percent relative to a year earlier. GDP grew 0.3 percent in IIQ2016 and
increased 1.4 percent relative to a year earlier. GDP grew 0.5 percent in
IIIQ2016 and increased 1.6 percent relative to a year earlier. GDP grew 0.6
percent in IVQ2016 and increased 2.1 percent relative to a year earlier. GDP
grew 0.6 percent in IQ2017 and increased 2.1 percent relative to a year
earlier. GDP grew 0.4 percent in IIQ2017 and 2.2
percent relative to a year earlier. GDP
increased 0.7 percent in IIIQ2017 and increased 2.4 percent relative to a year
earlier. GDP grew 1.0 percent in IVQ2017 and 2.7 percent relative to a year
earlier. GDP increased 0.9 percent in IQ2018 and increased 3.1 percent relative
to a year earlier. GDP grew 0.7 percent in IIQ2018 and increased 3.3 percent
relative to a year earlier. GDP increased 0.5 percent in IIIQ2018 and increased
3.1 percent relative to a year earlier. GDP grew 0.3 percent in IVQ2018 and
increased 2.5 percent relative to a year earlier. GDP grew 0.7 percent in
IQ2019 and increased 2.3 percent relative to a year earlier. GDP grew 0.4
percent in IIQ2019 and increased 2.0 percent relative to a year earlier. GDP
grew 0.6 percent in IIIQ2019 and increased 2.1 percent relative to a year
earlier. GDP grew 0.6 percent in IVQ2019 and increased 2.3 percent relative to
a year earlier. GDP decreased 1.3 percent in IQ2020 and increased 0.3 percent
relative to a year earlier. GDP decreased 9.5 percent in IIQ2020 and decreased
9.5 percent relative to a year earlier (See Table 6 at https://www.bea.gov/sites/default/files/2020-07/gdp2q20_adv.pdf and entire
data in https://apps.bea.gov/iTable/index_nipa.cfm), in the
global recession with output in the US reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the lockdown
of economic activity in the COVID-19 event. Rates of a quarter relative to the prior
quarter capture better deceleration of the economy than rates on a quarter
relative to the same quarter a year earlier. The critical question for which
there is not yet definitive solution is whether what lies ahead is continuing
growth recession with the economy crawling and unemployment/underemployment at
extremely high levels or another contraction or conventional recession.
Forecasts of various sources continued to maintain high growth in 2011 without
taking into consideration the continuous slowing of the economy in late 2010
and the first half of 2011. The sovereign debt crisis in the euro area and
growth in China have been common sources of doubts on the rate and direction of
economic growth in the US. There is weak internal demand in the US with almost
recent higher growth of investment and spikes of consumption driven by burning
saving because of financial repression in the form of low interest rates and
bloated balance sheet of the Fed.
Table I-6, US,
Real GDP and Percentage Change Relative to IVQ2007 and Prior Quarter, Billions
Chained 2012 Dollars and ∆%
|
|
Real GDP,
Billions Chained 2012 Dollars
|
∆% Relative
to IVQ2007
|
∆% Relative
to Prior Quarter
|
∆%
over Year Earlier |
|
IVQ2007
|
15,762.0
|
NA
|
0.6
|
2.0
|
|
IQ2008
|
15,671.4
|
-0.6
|
-0.6
|
1.1
|
|
IIQ2008
|
15,752.3
|
-0.1
|
0.5
|
1.1
|
|
IIIQ2008
|
15,667.0
|
-0.6
|
-0.5
|
0.0
|
|
IVQ2008
|
15,328.0
|
-2.8
|
-2.2
|
-2.8
|
|
IQ2009
|
15,155.9
|
-3.8
|
-1.1
|
-3.3
|
|
IIQ2009
|
15,134.1
|
-4.0
|
-0.1
|
-3.9
|
|
IIIQ2009
|
15,189.2
|
-3.6
|
0.4
|
-3.0
|
|
IV2009
|
15,356.1
|
-2.6
|
1.1
|
0.2
|
|
IQ2010
|
15,415.1
|
-2.2
|
0.4
|
1.7
|
|
IIQ2010
|
15,557.3
|
-1.3
|
0.9
|
2.8
|
|
IIIQ2010
|
15,672.0
|
-0.6
|
0.7
|
3.2
|
|
IVQ2010
|
15,750.6
|
-0.1
|
0.5
|
2.6
|
|
IQ2011
|
15,712.8
|
-0.3
|
-0.2
|
1.9
|
|
IIQ2011
|
15,825.1
|
0.4
|
0.7
|
1.7
|
|
IIIQ2011
|
15,820.7
|
0.4
|
0.0
|
0.9
|
|
IVQ2011
|
16,004.1
|
1.5
|
1.2
|
1.6
|
|
IQ2012
|
16,129.5
|
2.3
|
0.8
|
2.7
|
|
IIQ2012
|
16,198.8
|
2.8
|
0.4
|
2.4
|
|
IIIQ2012
|
16,220.7
|
2.9
|
0.1
|
2.5
|
|
IVQ2012
|
16,239.1
|
3.0
|
0.1
|
1.5
|
|
IQ2013
|
16,383.0
|
3.9
|
0.9
|
1.6
|
|
IIQ2013
|
16,403.2
|
4.1
|
0.1
|
1.3
|
|
IIIQ2013
|
16,531.7
|
4.9
|
0.8
|
1.9
|
|
IVQ2013
|
16,663.6
|
5.7
|
0.8
|
2.6
|
|
IQ2014
|
16,616.5
|
5.4
|
-0.3
|
1.4
|
|
IIQ2014
|
16,841.5
|
6.8
|
1.4
|
2.7
|
|
IIIQ2014
|
17,047.1
|
8.2
|
1.2
|
3.1
|
|
IVQ2014
|
17,143.0
|
8.8
|
0.6
|
2.9
|
|
IQ2015
|
17,305.8
|
9.8
|
0.9
|
4.1
|
|
IIQ2015
|
17,422.8
|
10.5
|
0.7
|
3.4
|
|
IIIQ2015
|
17,486.0
|
10.9
|
0.4
|
2.6
|
|
IVQ2015
|
17,514.1
|
11.1
|
0.2
|
2.2
|
|
IQ2016
|
17,613.3
|
11.7
|
0.6
|
1.8
|
|
IIQ2016
|
17,668.2
|
12.1
|
0.3
|
1.4
|
|
IIIQ2016
|
17,764.4
|
12.7
|
0.5
|
1.6
|
|
IVQ2016
|
17,876.2
|
13.4
|
0.6
|
2.1
|
|
IQ2017
|
17,977.3
|
14.1
|
0.6
|
2.1
|
|
IIQ2017
|
18,054.1
|
14.5
|
0.4
|
2.2
|
|
IIIQ2017
|
18,185.6
|
15.4
|
0.7
|
2.4
|
|
IVQ2017
|
18,359.4
|
16.5
|
1.0
|
2.7
|
|
IQ2018
|
18,530.5
|
17.6
|
0.9
|
3.1
|
|
IIQ2018
|
18,654.4
|
18.4
|
0.7
|
3.3
|
|
IIIQ2018
|
18,752.4
|
19.0
|
0.5
|
3.1
|
|
IVQ2018
|
18,813.9
|
19.4
|
0.3
|
2.5
|
|
IQ2019
|
18,950.3
|
20.2
|
0.7
|
2.3
|
|
IIQ2019
|
19,020.6
|
20.7
|
0.4
|
2.0
|
|
IIIQ2019
|
19,141.7
|
21.4
|
0.6
|
2.1
|
|
IVQ2019
|
19,254.0
|
22.2
|
0.6
|
2.3
|
|
IQ2020
|
19,010.8
|
20.6
|
-1.3
|
0.3
|
|
IIQ2020
|
17,205.8
|
9.2
|
-9.5
|
-9.5
|
Table I-8, US,
Contributions to the Rate of Growth of GDP in Percentage Points
|
|
GDP
|
PCE
|
GDI
|
∆ PI
|
Trade
|
GOV
|
|
2020
|
|
|
|
|
|
|
|
I
|
-5.0
|
-4.75
|
-1.56
|
-1.34
|
1.13
|
0.22
|
|
II
|
-32.9
|
-25.05
|
-9.36
|
-3.98
|
0.68
|
0.82
|
|
2019
|
|
|
|
|
|
|
|
I
|
2.9
|
1.25
|
0.71
|
0.21
|
0.55
|
0.43
|
|
II
|
1.5
|
2.47
|
-1.04
|
-0.97
|
-0.79
|
0.86
|
|
III
|
2.6
|
1.83
|
0.34
|
-0.09
|
0.04
|
0.37
|
|
IV
|
2.4
|
1.07
|
-0.64
|
-0.82
|
1.52
|
0.42
|
|
2018
|
|
|
|
|
|
|
|
I
|
3.8
|
1.40
|
1.83
|
0.41
|
0.29
|
0.26
|
|
II
|
2.7
|
2.13
|
-0.19
|
-0.94
|
0.25
|
0.50
|
|
III
|
2.1
|
1.79
|
1.72
|
1.58
|
-1.83
|
0.44
|
|
IV
|
1.3
|
1.05
|
0.69
|
0.23
|
-0.27
|
-0.16
|
|
2017
|
|
|
|
|
|
|
|
I
|
2.3
|
2.15
|
-0.23
|
-1.41
|
0.36
|
0.01
|
|
II
|
1.7
|
1.23
|
0.61
|
0.34
|
-0.39
|
0.27
|
|
III
|
2.9
|
1.57
|
1.26
|
1.05
|
0.08
|
0.04
|
|
IV
|
3.9
|
2.82
|
1.07
|
-0.50
|
-0.49
|
0.49
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
I
|
2.3
|
2.08
|
-0.39
|
-0.73
|
-0.05
|
0.66
|
|
II
|
1.3
|
1.73
|
-0.58
|
-0.83
|
0.22
|
-0.11
|
|
III
|
2.2
|
1.75
|
0.03
|
-0.50
|
0.08
|
0.33
|
|
IV
|
2.5
|
1.68
|
1.80
|
1.35
|
-1.13
|
0.19
|
|
2015
|
|
|
|
|
|
|
|
I
|
3.8
|
2.41
|
2.46
|
2.28
|
-1.38
|
0.37
|
|
II
|
2.7
|
2.15
|
0.23
|
-0.35
|
-0.25
|
0.60
|
|
III
|
1.5
|
2.24
|
-0.13
|
-0.69
|
-0.97
|
0.32
|
|
IV
|
0.6
|
1.44
|
-0.83
|
-0.64
|
-0.22
|
0.26
|
|
2014
|
|
|
|
|
|
|
|
I
|
-1.1
|
1.03
|
-0.74
|
-1.40
|
-1.11
|
-0.31
|
|
II
|
5.5
|
2.97
|
2.92
|
1.05
|
-0.46
|
0.10
|
|
III
|
5.0
|
2.92
|
1.47
|
0.17
|
0.10
|
0.49
|
|
IV
|
2.3
|
3.26
|
0.09
|
-0.69
|
-1.05
|
-0.04
|
|
2013
|
|
|
|
|
|
|
|
I
|
3.6
|
1.44
|
2.43
|
1.33
|
0.40
|
-0.68
|
|
II
|
0.5
|
0.20
|
0.75
|
0.23
|
-0.33
|
-0.13
|
|
III
|
3.2
|
1.10
|
2.60
|
1.48
|
-0.14
|
-0.40
|
|
IV
|
3.2
|
2.31
|
0.27
|
-0.62
|
1.23
|
-0.58
|
|
2012
|
|
|
|
|
|
|
|
I
|
3.2
|
2.19
|
1.32
|
-0.59
|
0.00
|
-0.34
|
|
II
|
1.7
|
0.41
|
1.47
|
0.21
|
0.27
|
-0.41
|
|
III
|
0.5
|
0.45
|
0.29
|
0.20
|
-0.08
|
-0.12
|
|
IV
|
0.5
|
1.22
|
-0.58
|
-1.70
|
0.57
|
-0.76
|
|
2011
|
|
|
|
|
|
|
|
I
|
-1.0
|
1.17
|
-1.10
|
-1.02
|
-0.02
|
-1.01
|
|
II
|
2.9
|
0.62
|
2.36
|
1.03
|
0.45
|
-0.55
|
|
III
|
-0.1
|
1.07
|
0.19
|
-2.23
|
-0.21
|
-1.16
|
|
IV
|
4.7
|
0.52
|
4.60
|
3.06
|
-0.36
|
-0.04
|
|
2010
|
|
|
|
|
|
|
|
I
|
1.5
|
1.32
|
1.28
|
1.30
|
-0.72
|
-0.33
|
|
II
|
3.7
|
2.16
|
2.95
|
0.92
|
-1.67
|
0.30
|
|
III
|
3.0
|
1.90
|
2.60
|
2.28
|
-0.94
|
-0.57
|
|
IV
|
2.0
|
1.80
|
-0.17
|
-1.25
|
0.91
|
-0.52
|
|
2009
|
|
|
|
|
|
|
|
I
|
-4.4
|
-0.52
|
-7.21
|
-2.14
|
2.40
|
0.92
|
|
II
|
-0.6
|
-1.03
|
-3.15
|
-1.04
|
2.39
|
1.22
|
|
III
|
1.5
|
1.92
|
-0.08
|
-0.33
|
-0.61
|
0.23
|
|
IV
|
4.5
|
-0.39
|
4.76
|
4.44
|
-0.07
|
0.17
|
|
1982
|
|
|
|
|
|
|
|
I
|
-6.1
|
1.80
|
-7.33
|
-5.33
|
-0.49
|
-0.05
|
|
II
|
1.8
|
0.75
|
-0.05
|
2.27
|
0.81
|
0.34
|
|
III
|
-1.5
|
1.64
|
-0.62
|
1.11
|
-3.22
|
0.68
|
|
IV
|
0.2
|
4.34
|
-5.38
|
-5.34
|
-0.10
|
1.30
|
|
1983
|
|
|
|
|
|
|
|
I
|
5.4
|
2.52
|
2.34
|
0.91
|
-0.30
|
0.81
|
|
II
|
9.4
|
5.21
|
5.95
|
3.42
|
-2.47
|
0.73
|
|
III
|
8.2
|
4.60
|
4.40
|
0.57
|
-2.26
|
1.49
|
|
IV
|
8.6
|
4.10
|
6.95
|
3.01
|
-1.14
|
-1.30
|
|
1984
|
|
|
|
|
|
|
|
I
|
8.1
|
2.21
|
7.23
|
4.94
|
-2.31
|
0.92
|
|
II
|
7.1
|
3.57
|
2.57
|
-0.29
|
-0.87
|
1.82
|
|
III
|
3.9
|
1.88
|
1.70
|
0.21
|
-0.36
|
0.69
|
|
IV
|
3.3
|
3.22
|
-1.07
|
-2.43
|
-0.56
|
1.74
|
|
1985
|
|
|
|
|
|
|
|
I
|
3.9
|
4.22
|
-2.14
|
-2.86
|
0.94
|
0.92
|
|
II
|
3.6
|
2.29
|
1.34
|
0.35
|
-1.91
|
1.85
|
|
III
|
6.2
|
4.76
|
-0.43
|
-0.15
|
-0.01
|
1.93
|
|
IV
|
3.0
|
0.52
|
2.81
|
1.40
|
-0.67
|
0.35
|
|
1986
|
|
|
|
|
|
|
|
I
|
3.8
|
2.16
|
0.04
|
-0.17
|
0.93
|
0.66
|
|
II
|
1.8
|
2.70
|
-1.30
|
-1.30
|
-1.33
|
1.75
|
|
III
|
3.9
|
4.43
|
-1.97
|
-1.63
|
-0.45
|
1.87
|
|
IV
|
2.2
|
1.55
|
0.25
|
-0.29
|
0.71
|
-0.33
|
|
1987
|
|
|
|
|
|
|
|
I
|
3.0
|
0.26
|
1.99
|
3.29
|
0.23
|
0.54
|
|
II
|
4.4
|
3.47
|
0.08
|
-1.00
|
0.14
|
0.70
|
|
III
|
3.5
|
2.91
|
0.03
|
-1.20
|
0.45
|
0.13
|
|
IV
|
7.0
|
0.57
|
4.96
|
4.97
|
0.18
|
1.33
|
|
1988
|
|
|
|
|
|
|
|
I
|
2.1
|
4.45
|
-3.64
|
-3.69
|
1.94
|
-0.67
|
|
II
|
5.4
|
1.90
|
1.73
|
0.33
|
1.44
|
0.29
|
|
III
|
2.4
|
2.25
|
0.38
|
0.05
|
-0.31
|
0.03
|
|
IV
|
5.4
|
2.91
|
1.12
|
0.28
|
-0.21
|
1.62
|
|
1989
|
|
|
|
|
|
|
|
I
|
4.1
|
1.19
|
2.43
|
1.80
|
0.86
|
-0.34
|
|
II
|
3.1
|
1.19
|
-0.71
|
-0.80
|
1.35
|
1.26
|
|
III
|
3.0
|
2.46
|
-0.64
|
-1.84
|
0.44
|
0.75
|
|
IV
|
0.8
|
1.11
|
-0.54
|
0.37
|
-0.20
|
0.42
|
|
1990
|
|
|
|
|
|
|
|
I
|
4.4
|
2.17
|
0.70
|
-0.10
|
0.25
|
1.33
|
|
II
|
1.5
|
0.77
|
0.03
|
1.38
|
0.52
|
0.13
|
|
III
|
0.3
|
1.00
|
-1.29
|
-0.74
|
0.44
|
0.13
|
|
IV
|
-3.6
|
-1.96
|
-3.66
|
-1.97
|
1.47
|
0.55
|
|
1991
|
|
|
|
|
|
|
|
I
|
-1.9
|
-1.00
|
-2.04
|
-0.26
|
0.69
|
0.49
|
|
II
|
3.2
|
2.11
|
0.05
|
-0.12
|
0.65
|
0.35
|
|
III
|
2.0
|
1.27
|
1.21
|
1.16
|
-0.21
|
-0.23
|
|
IV
|
1.4
|
-0.12
|
2.15
|
1.91
|
-0.02
|
-0.61
|
|
1992
|
|
|
|
|
|
|
|
I
|
4.9
|
4.83
|
-1.16
|
-1.81
|
0.44
|
0.77
|
|
II
|
4.4
|
1.78
|
3.40
|
1.44
|
-0.63
|
-0.14
|
|
III
|
4.0
|
2.77
|
0.50
|
-0.19
|
0.19
|
0.55
|
|
IV
|
4.2
|
3.08
|
1.92
|
0.14
|
-0.77
|
0.01
|
|
1993
|
|
|
|
|
|
|
|
I
|
0.7
|
0.98
|
1.49
|
1.04
|
-0.79
|
-1.01
|
|
II
|
2.3
|
2.35
|
0.39
|
-0.72
|
-0.40
|
0.01
|
|
III
|
1.9
|
2.88
|
-0.42
|
-1.38
|
-0.66
|
0.11
|
|
IV
|
5.6
|
2.31
|
3.40
|
0.87
|
0.45
|
0.29
|
Note: PCE:
personal consumption expenditures; GDI: gross private domestic investment; ∆
PI: change in private inventories; Trade: net exports of goods and services;
GOV: government consumption expenditures and gross investment; – is negative
and no sign positive
GDP: percent
change at annual rate; percentage points at annual rates
Source: US
Bureau of Economic Analysis
The Bureau of Economic Analysis (BEA)
(pages 1-2) explains growth of GDP in IIQ2020 as follows (https://www.bea.gov/sites/default/files/2020-07/gdp2q20_adv.pdf):
“Real gross domestic product (GDP) decreased at
an annual rate of 32.9 percent in the second quarter of 2020 (table 1),
according to the "advance" estimate released by the Bureau of
Economic Analysis. In the first quarter, real GDP decreased 5.0 percent.
The GDP estimate released today is based on source
data that are incomplete or subject to further
revision by the source agency (see “Source Data for
the Advance Estimate” on page 2). The "second" estimate for the
second quarter, based on more complete data, will be released on August 27,
2020. The decrease in real GDP reflected decreases in personal
consumption expenditures (PCE), exports, private inventory investment,
nonresidential fixed investment, residential fixed investment, and state and
local government spending that were partly offset by an increase in federal
government spending. Imports, which are a subtraction in the calculation of
GDP, decreased (table 2).
The decrease in PCE reflected decreases in services
(led by health care) and goods (led by clothing and footwear). The decrease in
exports primarily reflected a decrease in goods (led by capital goods). The decrease
in private inventory investment primarily reflected a decrease in retail (led
by motor vehicle dealers). The decrease in nonresidential fixed investment
primarily reflected a decrease in equipment (led by transportation equipment),
while the decrease in residential investment primarily reflected a decrease in
new single-family housing.”
There are positive contributions to growth in IIQ2020 shown
in Table I-9:
·
Growth of national defense expenditures at 4.1 percent
·
Growth of government expenditures (GOV) at 2.7 percent
·
Growth of federal government expenditures (Federal GOV) at 17.4
percent
·
Contraction of imports, which are a deduction from growth, at
53.4 percent
There were negative contributions in IIQ2020:
·
Personal consumptions expenditures (PCE) contracting at 34.6
percent
·
Durable goods contracting at 1.4 percent
·
Nonresidential fixed investment contracting at 27.0 percent
·
Residential fixed investment contracting at 38.7 percent
·
Exports contracting at 64.1 percent
·
Inventory divestment subtracting 3.98 percentage points
The BEA finding accelerating factors:
- Contraction of imports,
which are a deduction from growth, at 53.4 percent after contracting at 15.0
percent in IQ2020
- Durable goods
contracting at 1.4 percent after contracting at 12.5 percent in IQ2020
- Government expending at
2.7 percent after growing at 1.3 percent in IQ2020
- Federal government increasing
at 17.4 percent after increasing at 1.6 percent in IQ2020
The BEA
finds offsetting decelerating factors:
·
Personal consumption expenditure PCE contracting at 34.6
percent after contracting at 6.9 percent in IQ2020
·
Nonresidential fixed investment (NRFI) contracting at 27.0
percent after contracting a 6.7 percent in IQ2020
·
Exports contracting at 64.1 percent after contracting at 9.5
percent in IQ2020
·
State and local government expenditures contracting at 5.6
percent after growing at 1.1 percent in IQ2020
An important aspect of growth in the US is the
decline in growth of real disposable personal income, or what is left after
taxes and inflation, which decreased at the rate of 0.2 percent in IIIQ2013
compared with a year earlier. Contraction of real disposable income of 2.5
percent in IVQ2013 relative to a year earlier is largely due to comparison with
an artificially higher level in anticipations of income in Nov and Dec 2012 to
avoid increases in taxes in 2013, an episode known as “fiscal cliff.” Real disposable personal income increased 3.1
percent in IQ2014 relative to a year earlier and 3.6 percent in IIQ2014
relative to a year earlier. Real disposable personal income increased 4.3
percent in IIIQ2014 relative to a year earlier and 5.2 percent in IVQ2014
compared with a year earlier. Real disposable personal income grew 4.9 percent
in IQ2015 relative to a year earlier partly because of contraction of energy
prices and increased at 4.4 percent in IIQ2015. Real disposable personal income
grew at 4.0 percent in IIIQ2015 relative to a year earlier and at 3.0 percent
in IVQ2015 relative to a year earlier. Real disposable income grew at 2.5
percent in IQ2016 relative to a year earlier and at 1.6 percent in IIQ2016
relative to a year earlier. Real disposable income grew at 1.8 percent in
IIIQ2016 relative to a year earlier and at 1.8 percent in IVQ2016 compared with
a year earlier. Real disposable income grew at 2.1 percent in IQ2017 relative
to a year earlier and grew at 3.3 percent in IIQ2017 relative to a year
earlier. Real disposable income grew at 3.5 percent in IIIQ2017 relative to a
year earlier and grew 3.4 percent in IVQ2017 relative to a year earlier. Real
disposable income grew at 3.6 percent in IQ2018 relative to a year earlier and
grew at 3.4 percent in IIQ2018 relative to a year earlier. Real disposable
personal income grew at 3.6 percent in IIIQ2018 relative to a year earlier and
at 3.7 percent in IVQ2018 relative to a year earlier. Real disposable income
grew at 3.2 percent in IQ2019 relative to a year earlier and grew at 2.1
percent in IIQ2019 relative to a year earlier. Real disposable income grew at 1.8
percent in IIIQ2019 relative to a year earlier. Real disposable income grew at 1.6
percent in IVQ2019 relative to a year earlier. Real disposable income grew at 1.4
percent in IQ2020 relative to a year earlier. Real disposable personal income
grew at 11.5 percent in IIQ2020 relative to a year earlier. The effects of
financial repression, or zero interest, are vividly shown in the decline of the
savings rate, or personal saving as percent of disposable income from 10.2
percent in IVQ2012 to 6.6 percent in IIIQ2013 and 6.3 percent in IVQ2013. The
savings rate eased to 7.3 percent in IQ2014, increasing to 7.4 percent in
IIQ2014 and stabilizing to 7.4 percent in IIIQ2014. The savings rate moved to
7.4 percent in IVQ2014, increasing to 7.7 percent in IQ2015. The savings rate
moved to 7.6 percent in IIQ2015, 7.7 percent in IIIQ2015 and 7.4 percent in
IVQ2015. The savings ratio moved to 7.5 percent in IQ2016 and 6.6 percent in
IIQ2016. The savings ratio eased at 6.3 percent in IIIQ2016 and at 6.4 percent
in IVQ2016. The savings ratio reached 7.0 percent in IQ2017 and 6.7 percent in
IIQ2017. The savings ratio eased to 6.7 percent in IIIQ2017 and 6.3 percent in
IVQ2017. The savings ratio increased to 7.2 percent in IQ2018 and 7.6 percent
in IIQ2018. The savings ratio eased to 7.5 percent in IIIQ2018 and increased to
7.8 percent in IVQ2018. The savings ratio increased to 8.5 percent in IQ2019,
easing to 7.3 percent in IIQ2019. The savings ratio eased to 7.2 percent in
IIIQ2019, stabilizing to 7.3 percent in IVQ2019. The savings ratio increased to
9.5 percent in IQ2020. The savings ratio increased to 25.7 percent in IIQ2020. Anticipation
of income in IVQ2012 to avoid higher taxes in 2013 caused increases in income
and savings while higher payroll taxes in 2013 restricted income growth and
savings in IQ2013. Zero interest rates induce risky investments with high
leverage and can contract balance sheets of families, business and financial
institutions when interest rates inevitably increase in the future. There is a
tradeoff of weaker economy in the future when interest rates increase by meager
growth in the present with forced consumption by zero interest rates. Microeconomics
consists of the analysis of allocation of scarce resources to alternative and
competing ends. Zero interest rates cloud he calculus of risk and returns in
consumption and investment, disrupting decisions that maintain the economy in
its long-term growth path.
Table I-9, US,
Percentage Seasonally Adjusted Annual Equivalent Quarterly Rates of Increase, %
|
II Q2019
|
III
Q2019
|
IV Q2019
|
IQ
2020
|
II
Q2020
|
|
|
GDP
|
1.5
|
2.6
|
2.4
|
-5.0
|
-32.9
|
|
PCE
|
3.7
|
2.7
|
1.6
|
-6.9
|
-34.6
|
|
Durable Goods
|
12.7
|
6.3
|
3.1
|
-12.5
|
-1.4
|
|
NRFI
|
0.0
|
1.9
|
-0.3
|
-6.7
|
-27.0
|
|
RFI
|
-2.1
|
4.6
|
5.8
|
19.0
|
-38.7
|
|
Net Exports
GS % Points
|
-0.79
|
0.04
|
1.52
|
1.13
|
0.68
|
|
Exports
|
-4.5
|
0.8
|
3.4
|
-9.5
|
-64.1
|
|
Imports
|
1.7
|
0.5
|
-7.5
|
-15.0
|
-53.4
|
|
GOV
|
5.0
|
2.1
|
2.4
|
1.3
|
2.7
|
|
Federal GOV
|
9.2
|
4.8
|
4.0
|
1.6
|
17.4
|
|
National
Defense
|
4.4
|
5.6
|
6.6
|
-0.3
|
4.1
|
|
GDP Growth %
Points
|
0.17
|
0.22
|
0.26
|
-0.01
|
0.20
|
|
State/Local
GOV
|
2.6
|
0.6
|
1.5
|
1.1
|
-5.6
|
|
∆ PI % Points
|
-0.97
|
-0.09
|
-0.82
|
-1.34
|
-3.98
|
|
Final Sales
of Domestic Product
|
2.5
|
2.7
|
3.2
|
-3.6
|
-29.3
|
|
Gross
Domestic Purchases
|
2.2
|
2.5
|
0.8
|
-5.9
|
-31.8
|
|
Prices Gross
Domestic Purchases |
2.2
|
1.3
|
1.3
|
1.4
|
-1.5
|
|
Prices of GDP
|
2.5
|
1.5
|
1.4
|
1.4
|
-1.8
|
|
Prices of GDP
Excluding Food and Energy
|
2.4
|
1.7
|
1.3
|
1.7
|
-1.4
|
|
Prices of PCE
|
2.5
|
1.4
|
1.5
|
1.3
|
-1.9
|
|
Prices of PCE
Excluding Food and Energy
|
2.1
|
1.9
|
1.3
|
1.6
|
-1.1
|
|
Prices of
Market Based PCE
|
2.1
|
1.1
|
1.5
|
1.3
|
-1.2
|
|
Prices of
Market Based PCE Excluding Food and Energy
|
1.6
|
1.6
|
1.3
|
1.7
|
-0.1
|
|
Real
Disposable Personal Income*
|
2.1
|
1.8
|
1.6
|
1.4
|
11.5
|
|
Personal
Saving As % Disposable Income
|
7.3
|
7.2
|
7.3
|
9.5
|
25.7
|
Note: PCE:
personal consumption expenditures; NRFI: nonresidential fixed investment; RFI:
residential fixed investment; GOV: government consumption expenditures and
gross investment; ∆ PI: change in
private
inventories; GDP - ∆ PI: final sales of domestic product; PP: percentage
points; Personal savings rate: savings as percent of disposable income
*Percent change
from quarter one year ago
Source: Bureau
of Economic Analysis
Percentage shares
of GDP are in Table I-10. PCE (personal consumption expenditures) is equivalent
to 67.1 percent of GDP and is under pressure with stagnant real disposable
income per person, elevated levels of unemployment and underemployment and
higher savings rates than before the global recession, temporarily interrupted
by financial repression in the form of zero interest rates. There is even
stronger pressure in the global recession with output in the US reaching a high
in Feb 2020 (https://www.nber.org/cycles.html), in the
lockdown of economic activity in the COVID-19 event. Gross private
domestic investment is also growing slowly even with about two trillion dollars
in cash holdings by companies. In a slowing world economy, it may prove more
difficult to grow exports faster than imports to generate higher growth. Bouts
of risk aversion revalue the dollar relative to most currencies in the world as
investors increase their holdings of dollar-denominated assets.
Table I-10, US,
Percentage Shares of GDP, %
|
|
IIQ2020
|
|
GDP
|
100.0
|
|
PCE
|
67.1
|
|
Goods
|
22.4
|
|
Durable
|
7.6
|
|
Nondurable
|
14.8
|
|
Services
|
44.7
|
|
Gross Private
Domestic Investment
|
16.0
|
|
Fixed Investment
|
17.6
|
|
NRFI
|
13.6
|
|
Structures
|
3.0
|
|
Equipment & Software
|
5.4
|
|
Intellectual Property
|
5.2
|
|
RFI
|
4.0
|
|
Change in Private
Inventories |
-1.7
|
|
Net Exports
of Goods and Services
|
-2.8
|
|
Exports
|
9.3
|
|
Goods
|
5.8
|
|
Services
|
3.4
|
|
Imports
|
12.1
|
|
Goods
|
10.0
|
|
Services
|
2.1
|
|
Government
|
19.8
|
|
Federal
|
7.8
|
|
National Defense
|
4.5
|
|
Nondefense
|
3.3
|
|
State and Local
|
12.0
|
PCE: personal
consumption expenditures; NRFI: nonresidential fixed investment; RFI:
residential fixed investment
Table I-11 shows
percentage point (PP) contributions to the annual levels of GDP growth in the
earlier recessions 1958-1959, 1975-1976, 1982-1993 and 2009, 2010, 2011, 2012,
2013, 2014 2015, 2016, 2017, 2018 and 2019. The data incorporate the new
revisions released by the BEA. The most striking contrast is in the rates of
growth of annual GDP in the expansion phases of 6.9 percent in 1959, 5.4
percent in 1976, and 4.6 percent in 1983 followed by 7.2 percent in 1984 and
4.2 percent in 1985. The National Bureau of Economic Research (NBER) dates a
contraction of the US from IQ1990 (Jul) to IQ1991 (Mar) (https://www.nber.org/cycles.html). The
expansion lasted until another contraction beginning in IQ2001 (Mar). US GDP
contracted 1.3 percent from the pre-recession peak of $8983.9 billion of
chained 2009 dollars in IIIQ1990 to the trough of $8865.6 billion in IQ1991 (https://apps.bea.gov/iTable/index_nipa.cfm). In
contrast, GDP grew 2.6 percent in 2010 after six consecutive quarters of
growth, 1.6 percent in 2011 after ten consecutive quarters of expansion, 2.2
percent in 2012 after 14 quarters of expansion, 1.8 percent in 2013 after 18
consecutive quarters of expansion, 2.5 percent in 2014 after 22 consecutive
quarters of expansion and 3.1 percent in 2015 after twenty-six consecutive
quarters of expansion. GDP grew at 1.7 percent in 2016 after thirty consecutive
quarters of expansion. GDP grew at 2.3 percent in 2017 after 34 quarters of
expansion. GDP grew at 3.0 percent in 2018 after 38 quarters of expansion. GDP
grew at 2.2 percent in 2019 after 42 quarters of expansion. Annual levels also
show much stronger growth of PCEs in the expansions after the earlier contractions
than in the expansion after the global recession of 2007. Gross domestic
investment was much stronger in the earlier expansions than in 2010, 2011,
2012, 2013, 2014, 2015, 2016, 2017, 2018 and 2019.
Table I-11, US,
Percentage Point Contributions to the Annual Growth Rate of GDP
|
|
GDP
|
PCE
|
GDI
|
∆ PI
|
Trade
|
GOV
|
|
1958
|
-0.7
|
0.52
|
-1.16
|
-0.17
|
-0.87
|
0.76
|
|
1959
|
6.9
|
3.51
|
2.83
|
0.83
|
0.00
|
0.60
|
|
1975
|
-0.2
|
1.36
|
-2.91
|
-1.24
|
0.86
|
0.49
|
|
1976
|
5.4
|
3.41
|
2.91
|
1.37
|
-1.05
|
0.12
|
|
1982
|
-1.8
|
0.88
|
-2.46
|
-1.31
|
-0.59
|
0.37
|
|
1983
|
4.6
|
3.51
|
1.60
|
0.28
|
-1.32
|
0.79
|
|
1984
|
7.2
|
3.30
|
4.73
|
1.90
|
-1.54
|
0.74
|
|
1985
|
4.2
|
3.20
|
-0.01
|
-1.03
|
-0.39
|
1.37
|
|
1986
|
3.5
|
2.58
|
0.03
|
-0.31
|
-0.29
|
1.14
|
|
1987
|
3.5
|
2.15
|
0.53
|
0.41
|
0.17
|
0.62
|
|
1988
|
4.2
|
2.65
|
0.45
|
-0.13
|
0.81
|
0.26
|
|
1989
|
3.7
|
1.86
|
0.72
|
0.17
|
0.51
|
0.58
|
|
1990
|
1.9
|
1.28
|
-0.45
|
-0.21
|
0.40
|
0.65
|
|
1991
|
-0.1
|
0.12
|
-1.09
|
-0.26
|
0.62
|
0.25
|
|
1992
|
3.5
|
2.36
|
1.11
|
0.28
|
-0.04
|
0.10
|
|
1993
|
2.8
|
2.24
|
1.24
|
0.07
|
-0.56
|
-0.17
|
|
2009
|
-2.5
|
-0.85
|
-3.52
|
-0.83
|
1.13
|
0.70
|
|
2010
|
2.6
|
1.20
|
1.86
|
1.42
|
-0.49
|
0.00
|
|
2011
|
1.6
|
1.29
|
0.94
|
-0.05
|
-0.01
|
-0.66
|
|
2012
|
2.2
|
1.03
|
1.64
|
0.17
|
0.00
|
-0.42
|
|
2013
|
1.8
|
0.99
|
1.11
|
0.23
|
0.22
|
-0.47
|
|
2014
|
2.5
|
1.99
|
0.95
|
-0.12
|
-0.25
|
-0.17
|
|
2015
|
3.1
|
2.55
|
0.95
|
0.31
|
-0.76
|
0.33
|
|
2016
|
1.7
|
1.87
|
-0.27
|
-0.57
|
-0.21
|
0.32
|
|
2017
|
2.3
|
1.79
|
0.60
|
-0.04
|
-0.22
|
0.16
|
|
2018
|
3.0
|
1.85
|
1.08
|
0.20
|
-0.25
|
0.32
|
|
2019
|
2.2
|
1.64
|
0.30
|
-0.02
|
-0.18
|
0.40
|
Table I-12
provides more detail of the contributions to growth of GDP from 2009 to 2019
using annual-level data. PCEs contributed 1.20 PPs to GDP growth in 2010 of
which 0.66 percentage points (PP) in goods and 0.57 PP in services. Gross
private domestic investment (GPDI) deducted 3.52 PPs of GDP growth in 2009 of
which -2.70 PPs by fixed investment and -0.83 PPs of inventory change (∆PI) and
added 1.86 PPs of GDI in 2010 of which 0.44 PPs of fixed investment and 1.42
PPs of inventory accumulation (∆PI). Trade, or exports of goods and services net
of imports, contributed 1.13 PPs in 2009 of which exports deducted 1.01 PPs and
imports added 2.14 PPs. In 2010, trade deducted 0.49 PPs with exports
contributing 1.35 PPs and imports deducting 1.84 PPs likely benefitting from
dollar revaluation. In 2009, government added 0.70 PP of which 0.47 PPs by the
federal government and 0.20 PPs by state and local government; in 2010,
government added 0.02 PPs of which 0.37 PPs by the federal government with
state and local government deducting 0.23 PPs. Table I-12 provides the
estimates for 2011, 2012, 2013, 2014, 2015, 2016 and 2017. PCE contributed 1.29
PPs in 2011 after 1.20 PPs in 2010. The contribution of PCE fell to 1.03 points
in 2012 and to 0.99 PPs in 2013, increasing to 1.99 PPs in 2014. PCE contributed
2.48 percentage points in 2015 and added 1.85 PPs in 2016. PCE contributed 1.78
percentage points in 2017. PCE contributed 2.05 PPs in 2018. PCE added 1.76 PPs
in 2019. The breakdown into goods and services is similar but with
contributions in 2012 of 0.48 PPs of goods and 0.55 PPs of services. In 2013,
goods contributed 0.70 PPs and services 0.29 PPs. Goods contributed 0.90 PPs in
2014 and services contributed 1.10 PPs. Goods contributed 1.03 percentage
points in 2015 and services 1.53 percentage points. Goods contributed 0.77 PPs
in 2016 and services contributed 1.10 PPs. Goods contributed 0.86 PPs in 2017
and services contributed 0.93 PPs. Goods contributed 0.86 PPs in 2018 and
services contributed 0.98 PPs. Goods contributed 0.78 PPs in 2019 and services
contributed 0.86 PPs. Gross private domestic investment contributed 1.86 PPs in
2010 with 1.42 PPs of change of private inventories but the contribution of
gross private domestic investment was only 0.94 PPs in 2011. The contribution
of GDI in 2012 increased to 1.64 PPs with fixed investment increasing its
contribution to 1.47 PPs and residential investment contributing 0.31 PPs for
the first time since 2009. GDI contributed 1.64 PPs in 2012 with 1.47 PPs from
fixed investment and 0.17 PPs from inventory change. GDI contributed 1.11 PPs
in 2013, 0.95 PPs in 2014 and 0.95 PPs in 2015. GDI deducted 0.27 PPs in 2016
with contribution of 0.30 PPs of fixed investment and deduction of 0.57 PPs by
inventory change. GDI contributed 0.60 PPs in 2017 with contribution of 0.64
PPs by fixed investment and 0.49 PPs by nonresidential fixed investment. GDI
contributed 1.08 percentage points in 2018 with contribution of 0.88 percentage
points by fixed investment and 0.91 percentage points by nonresidential fixed
investment. GDI contributed 0.30 percentage points in 2019 with contributions
of 0.32 percentage points by fixed investment and 0.39 percentage points by
nonresidential fixed investment. Net exports of goods and services deducted
marginally in 2011 with 0.01 PPs and added 0.00 PPs in 2012. Net trade
contributed 0.22 PPs in 2013 and deducted 0.25 PPs in 2014. Net trade deducted
0.76 percentage points in 2015 and deducted 0.21 PPs in 2016. Net trade
deducted 0.22 percentage points in 2017 and deducted 0.25 percentage points in
2018. Net trade deducted 0.18 percentage points in 2019. The contribution of
exports fell from 1.35 PPs in 2010 and 0.90 PPs in 2011 to only 0.46 PPs in
2012, 0.48 PPs in 2013 and 0.57 PPs in 2014. Exports contributed only 0.06
percentage points in 2015 and 0.04 percentage points in 2016. Exports
contributed 0.47 PPs in 2017 and contributed 0.36 percentage points in 2018.
Exports deducted 0.01 percentage points in 2019. Government deducted 0.66 PPs
in 2011, 0.42 PPs in 2012 and 0.47 PPs in 2013. Government deducted 0.17 PPs in
2014 and contributed 0.33 PPs in 2015, contributing 0.32 PPs in 2016.
Government contributed 0.16 PPs in 2017 and contributed 0.32 PP in 2018.
Government contributed 0.40 PP in 2019. Demand weakened in 2013 with lower
contribution of personal consumption expenditures of 0.99 PPs and of gross
domestic investment of 1.11 PPs. PCE
contributed 1.99 PPs in 2014 and GDI 0.95 PPs. PCE contributed 2.55 PPs in 2015
and GDI contributed 0.95 PPs. PCE contributed 1.87 PPs in 2016 and GDI deducted
0.27 PPs. PCE contributed 1.79 PPs in 2017 and GDI added 0.60 PPs. PCE
contributed 1.85 PP in 2018 and GDI added 1.08 PPs. PCE contributed 1.64 PPs in
2019 and GDI added 0.30 PPs. Net trade contributed only 0.22 PPs in 2013 and
deducted 0.25 PPs in 2014, deducting 0.76 PPs in 2015. Net trade deducted 0.21
PPs in 2016 and deducted 0.22 PPs in 2017. Net trade deducted 0.25 PPs in 2018.
Net trade deducted 0.18 PPs in 2019. The expansion since IIIQ2009 has been
characterized by weak contributions of aggregate demand, which is the sum of
personal consumption expenditures plus gross private domestic investment. The
US did not recover strongly from the global recessions as typical in past
cyclical expansions. Recoveries tend to be more sluggish as expansions mature.
At the margin in IVQ2011, the acceleration of expansion was driven by inventory
accumulation instead of aggregate demand of consumption and investment. Growth
of PCE was partly the result of burning savings because of financial
repression, which may not be sustainable in the future while creating multiple
distortions of resource allocation and growth restraint.
Table I-12, US,
Contributions to Growth of Gross Domestic Product in Percentage Points
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
|
|
GDP Growth ∆%
|
-2.5
|
2.6
|
1.6
|
2.2
|
1.8
|
2.5
|
3.1
|
|
Personal
Consumption Expenditures (PCE)
|
-0.85
|
1.20
|
1.29
|
1.03
|
0.99
|
1.99
|
2.55
|
|
Goods
|
-0.70
|
0.62
|
0.49
|
0.48
|
0.70
|
0.90
|
1.03
|
|
Durable
|
-0.45
|
0.39
|
0.35
|
0.41
|
0.42
|
0.50
|
0.53
|
|
Nondurable
|
-0.25
|
0.24
|
0.14
|
0.07
|
0.28
|
0.40
|
0.50
|
|
Services
|
-0.15
|
0.57
|
0.80
|
0.55
|
0.29
|
1.10
|
1.53
|
|
Gross Private
Domestic Investment (GPDI)
|
-3.52
|
1.86
|
0.94
|
1.64
|
1.11
|
0.95
|
0.95
|
|
Fixed Investment
|
-2.70
|
0.44
|
0.99
|
1.47
|
0.87
|
1.07
|
0.65
|
|
Nonresidential
|
-1.95
|
0.52
|
1.00
|
1.16
|
0.54
|
0.95
|
0.32
|
|
Structures
|
-0.72
|
-0.50
|
0.07
|
0.34
|
0.04
|
0.33
|
-0.03
|
|
Equipment, software
|
-1.22
|
0.92
|
0.69
|
0.62
|
0.28
|
0.42
|
0.19
|
|
Intellectual Property
|
-0.02
|
0.11
|
0.24
|
0.20
|
0.22
|
0.20
|
0.16
|
|
Residential
|
-0.74
|
-0.08
|
0.00
|
0.31
|
0.34
|
0.12
|
0.33
|
|
Change
Private Inventories
|
-0.83
|
1.42
|
-0.05
|
0.17
|
0.23
|
-0.12
|
0.31
|
|
Net Exports
of Goods and Services
|
1.13
|
-0.49
|
-0.01
|
0.00
|
0.22
|
-0.25
|
-0.76
|
|
Exports
|
-1.01
|
1.35
|
0.90
|
0.46
|
0.48
|
0.57
|
0.06
|
|
Goods
|
-1.00
|
1.12
|
0.61
|
0.36
|
0.30
|
0.42
|
-0.03
|
|
Services
|
-0.01
|
0.23
|
0.28
|
0.10
|
0.18
|
0.14
|
0.09
|
|
Imports
|
2.14
|
-1.84
|
-0.91
|
-0.46
|
-0.26
|
-0.81
|
-0.81
|
|
Goods
|
2.08
|
-1.74
|
-0.82
|
-0.38
|
-0.25
|
-0.75
|
-0.73
|
|
Services
|
0.06
|
-0.10
|
-0.09
|
-0.09
|
-0.01
|
-0.06
|
-0.08
|
|
Government
Consumption Expenditures and Gross Investment
|
0.70
|
0.00
|
-0.66
|
-0.42
|
-0.47
|
-0.17
|
0.33
|
|
Federal
|
0.47
|
0.35
|
-0.23
|
-0.16
|
-0.44
|
-0.19
|
0.00
|
|
National Defense
|
0.29
|
0.16
|
-0.12
|
-0.18
|
-0.34
|
-0.19
|
-0.09
|
|
Nondefense
|
0.18
|
0.19
|
-0.11
|
0.03
|
-0.10
|
0.00
|
0.09
|
|
State
and Local
|
0.23
|
-0.35
|
-0.44
|
-0.26
|
-0.03
|
0.02
|
0.33
|
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
|
|
GDP Growth ∆%
|
2.5
|
3.1
|
1.7
|
2.3
|
3.0
|
2.2
|
|
Personal
Consumption Expenditures (PCE)
|
1.99
|
2.55
|
1.87
|
1.79
|
1.85
|
1.64
|
|
Goods
|
0.90
|
1.03
|
0.77
|
0.86
|
0.86
|
0.78
|
|
Durable
|
0.50
|
0.53
|
0.41
|
0.49
|
0.48
|
0.34
|
|
Nondurable
|
0.40
|
0.50
|
0.36
|
0.37
|
0.38
|
0.44
|
|
Services
|
1.10
|
1.53
|
1.10
|
0.93
|
0.98
|
0.86
|
|
Gross Private
Domestic Investment (GPDI)
|
0.95
|
0.95
|
-0.27
|
0.60
|
1.08
|
0.30
|
|
Fixed
Investment
|
1.07
|
0.65
|
0.30
|
0.64
|
0.88
|
0.32
|
|
Nonresidential
|
0.95
|
0.32
|
0.07
|
0.49
|
0.91
|
0.39
|
|
Structures
|
0.33
|
-0.03
|
-0.14
|
0.12
|
0.11
|
-0.02
|
|
Equipment, software
|
0.42
|
0.19
|
-0.10
|
0.18
|
0.45
|
0.12
|
|
Intellectual Property
|
0.20
|
0.16
|
0.32
|
0.18
|
0.34
|
0.29
|
|
Residential
|
0.12
|
0.33
|
0.23
|
0.15
|
-0.02
|
-0.07
|
|
Change
Private Inventories
|
-0.12
|
0.31
|
-0.57
|
-0.04
|
0.20
|
-0.02
|
|
Net Exports
of Goods and Services
|
-0.25
|
-0.76
|
-0.21
|
-0.22
|
-0.25
|
-0.18
|
|
Exports
|
0.57
|
0.06
|
0.04
|
0.47
|
0.36
|
-0.01
|
|
Goods
|
0.42
|
-0.03
|
0.04
|
0.31
|
0.33
|
-0.01
|
|
Services
|
0.14
|
0.09
|
-0.01
|
0.15
|
0.03
|
-0.01
|
|
Imports
|
-0.81
|
-0.81
|
-0.25
|
-0.68
|
-0.62
|
-0.16
|
|
Goods
|
-0.75
|
-0.73
|
-0.17
|
-0.56
|
-0.60
|
-0.06
|
|
Services
|
-0.06
|
-0.08
|
-0.08
|
-0.12
|
-0.01
|
-0.10
|
|
Government
Consumption Expenditures and Gross Investment
|
-0.17
|
0.33
|
0.32
|
0.16
|
0.32
|
0.40
|
|
Federal
|
-0.19
|
0.00
|
0.04
|
0.02
|
0.18
|
0.26
|
|
National Defense
|
-0.19
|
-0.09
|
-0.02
|
0.03
|
0.13
|
0.21
|
|
Nondefense
|
0.00
|
0.09
|
0.06
|
-0.01
|
0.06
|
0.05
|
|
State
and Local
|
0.02
|
0.33
|
0.28
|
0.14
|
0.13
|
0.14
|
Source: US
Bureau of Economic Analysis
https://apps.bea.gov/iTable/index_nipa.cfm
Industrial production increased 1.4 percent in May 2020 and decreased
12.5 percent in Apr 2020 after decreasing 4.6 percent in Mar 2020, with all
data seasonally adjusted. The Board of Governors
of the Federal Reserve System conducted the annual revision of industrial
production released on Mar 27, 2019 (https://www.federalreserve.gov/releases/g17/revisions/Current/DefaultRev.htm):
“The Federal
Reserve has revised its index of industrial production (IP) and the related
measures of capacity and capacity utilization.[1] On net,
the revisions to the growth rates for total IP for recent years were small and
positive, with the estimates for 2016 and 2017 a bit higher and the estimates
for 2015 and 2018 slightly lower.[2] Total IP
is still reported to have increased from the end of the recession in mid-2009
through late 2014 before declining in 2015 and rebounding in mid-2016.
Subsequently, the index advanced around 7 1/2 percent over 2017 and 2018.
Capacity for
total industry expanded modestly in each year from 2015 to 2017 before
advancing 1 1/2 percent in 2018; it is expected to advance about 2 percent in
2019. Revisions for recent years were very small and showed slightly less
expansion in most years relative to earlier reports.
In the fourth
quarter of 2018, capacity utilization for total industry stood at 79.4 percent,
about 3/4 percentage point above its previous estimate and about 1/2 percentage
point below its long-run (1972–2018) average. The utilization rate in 2017 is
also higher than its previous estimate.”
The report of the Board of Governors of the Federal Reserve
System states (https://www.federalreserve.gov/releases/g17/current/default.htm):
“Total industrial production rose
5.4 percent in June after increasing 1.4 percent in May; even so, it
remained 10.9 percent below its pre-pandemic February level. For the
second quarter as a whole, the index fell 42.6 percent at an annual rate,
its largest quarterly decrease since the industrial sector retrenched after World War II.
Manufacturing output climbed 7.2 percent in June, as all major industries
posted increases. The largest gain—105.0 percent—was registered by motor
vehicles and parts, while factory production elsewhere rose 3.9 percent.
Mining production fell 2.9 percent, and the output of utilities increased
4.2 percent. At 97.5 percent of its 2012 average, the level of
total industrial production was 10.8 percent lower in June than it was a
year earlier. Capacity utilization for the industrial sector increased
3.5 percentage points to 68.6 percent in June, a rate that is
11.2 percentage points below its long-run (1972–2019) average but
1.9 percentage points above its trough during the Great Recession.” In the six months ending in Jun 2020, United
States national industrial production accumulated change of minus 11.1 percent
at the annual equivalent rate of minus 20.9 percent, which is lower than growth
of minus 10.8 percent in the 12 months ending in Jun 2020. Excluding growth of
0.1 percent in Feb 2019, growth in the remaining five months from Jan 2019 to
Jun 2020 accumulated to minus 11.2 percent or minus 24.7 percent annual equivalent.
Industrial production increased 5.4 percent in one of the past six months, 1.4
percent in one month, 0.1 percent in one month, minus 12.7 percent in one
month, minus 4.4 percent in one month and minus 0.4 in one month. Industrial
production decreased at annual equivalent 24.2 percent in the most recent
quarter from Apr 2020 to Jun 2020 and decreased at 17.5 percent annual equivalent
in the prior quarter from Jan 2020 to Mar 2020. Business equipment accumulated
change of minus 18.0 percent in the six months from Jan 2020 to Jun 2020, at
the annual equivalent rate of minus 32.7 percent, which is lower than growth of
minus 18.2 percent in the 12 months ending in Jun 2020. The Fed analyzes
capacity utilization of total industry in its report (https://www.federalreserve.gov/releases/g17/Current/default.htm): ”Capacity
utilization for the industrial sector increased 3.5 percentage points to
68.6 percent in June, a rate that is 11.2 percentage points below its
long-run (1972–2019) average but 1.9 percentage points above its trough
during the Great Recession.” United States industry apparently decelerated
to a lower growth rate followed by possible acceleration, weakening growth in
past months and deep contraction in the global recession, with output in the US
reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the
lockdown of economic activity in the COVID-19 event.
Manufacturing decreased 22.3 percent from the peak in Jun 2007
to the trough in Apr 2009 and increased 18.3 percent from the trough in Apr
2009 to Dec 2019. Manufacturing increased 8.9 percent from the trough in Apr
2009 to Jun 2020. Manufacturing in Jun 2020 is lower by 15.3 percent relative
to the peak in Jun 2007. The
US maintained growth at 3.0 percent on average over entire cycles with
expansions at higher rates compensating for contractions. US economic
growth has been at only 1.2 percent on average in the cyclical expansion in the
44 quarters from IIIQ2009 to IIQ2020 and in the global recession with output in
the US reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the
lockdown of economic activity in the COVID-19 event. Boskin (2010Sep) measures
that the US economy grew at 6.2 percent in the first four quarters and 4.5
percent in the first 12 quarters after the trough in the second quarter of
1975; and at 7.7 percent in the first four quarters and 5.8 percent in the
first 12 quarters after the trough in the first quarter of 1983 (Professor
Michael J. Boskin, Summer of Discontent, Wall
Street Journal, Sep 2, 2010 http://professional.wsj.com/article/SB10001424052748703882304575465462926649950.html). There are
new calculations using the revision of US GDP and personal income data since
1929 by the Bureau of Economic Analysis (BEA) (http://bea.gov/iTable/index_nipa.cfm) and the
first estimate of GDP for IIQ2020 (https://www.bea.gov/sites/default/files/2020-07/gdp2q20_adv.pdf). The
average of 7.7 percent in the first four quarters of major cyclical expansions
is in contrast with the rate of growth in the first four quarters of the
expansion from IIIQ2009 to IIQ2010 of only 2.8 percent obtained by dividing GDP
of $15,557.3 billion in IIQ2010 by GDP of $15,134.1 billion in IIQ2009
{[($15,557.3/$15,134.1) -1]100 = 2.8%], or accumulating the quarter on quarter
growth rates (Section
I and earlier https://cmpassocregulationblog.blogspot.com/2020/06/mediocre-cyclical-united-states.html). The
expansion from IQ1983 to IQ1986 was at the average annual growth rate of 5.7 percent, 5.3 percent from
IQ1983 to IIIQ1986, 5.1 percent from IQ1983 to IVQ1986, 5.0 percent from IQ1983
to IQ1987, 5.0 percent from IQ1983 to IIQ1987, 4.9 percent from IQ1983 to
IIIQ1987, 5.0 percent from IQ1983 to IVQ1987, 4.9 percent from IQ1983 to
IIQ1988, 4.8 percent from IQ1983 to IIIQ1988, 4.8 percent from IQ1983 to
IVQ1988, 4.8 percent from IQ1983 to IQ1989, 4.7 percent from IQ1983 to IIQ1989,
4.6 percent from IQ1983 to IIIQ1989, 4.5 percent from IQ1983 to IVQ1989. 4.5
percent from IQ1983 to IQ1990, 4.4 percent from IQ1983 to IIQ1990, 4.3 percent
from IQ1983 to IIIQ1990, 4.0 percent from IQ1983 to IVQ1990, 3.8 percent from
IQ1983 to IQ1991, 3.8 percent from IQ1983 to IIQ1991, 3.8 percent from IQ1983
to IIIQ1991, 3.7 percent from IQ1983 to IVQ1991, 3.7 percent from IQ1983 to
IQ1992, 3.7 percent from IQ1983 to IIQ1992, 3.7 percent from IQ1983 to
IIIQ2019, 3.8 percent from IQ1983 to IVQ1992, 3.7 percent from IQ1983 to IQ1993,
3.6 percent from IQ1983 to IIQ1993, 3.6 percent from IQ1983 to IIIQ1993, 3.7
percent from IQ1983 to IVQ1993 and at 7.9 percent from IQ1983 to IVQ1983 (Section I and earlier https://cmpassocregulationblog.blogspot.com/2020/06/mediocre-cyclical-united-states.html). The
National Bureau of Economic Research (NBER) dates a contraction of the US from
IQ1990 (Jul) to IQ1991 (Mar) (https://www.nber.org/cycles.html). The
expansion lasted until another contraction beginning in IQ2001 (Mar). US GDP
contracted 1.3 percent from the pre-recession peak of $8983.9 billion of
chained 2009 dollars in IIIQ1990 to the trough of $8865.6 billion in IQ1991 (https://apps.bea.gov/iTable/index_nipa.cfm). The US
maintained growth at 3.0 percent on average over entire cycles with expansions
at higher rates compensating for contractions. Growth at trend in the entire
cycle from IVQ2007 to IIQ2020 and in the global recession with output in the US
reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the
lockdown of economic activity in the COVID-19 event would have accumulated to
44.7 percent. GDP in IIQ2020 would be $22,807.6 billion (in constant dollars of
2012) if the US had grown at trend, which is higher by $5601.8 billion than
actual $17,205.8 billion. There are more than five trillion dollars of GDP less
than at trend, explaining the 41.3 million unemployed or underemployed
equivalent to actual unemployment/underemployment of 23.9 percent of the
effective labor force with the largest part originating in the global recession
with output in the US reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the
lockdown of economic activity in the COVID-19 event (https://cmpassocregulationblog.blogspot.com/2020/07/increase-of-total-nonfarm-payroll-jobs.html and earlier https://cmpassocregulationblog.blogspot.com/2020/06/creation-of-three-million-private.html). Unemployment is decreasing while employment is increasing in
initial adjustment of the lockdown of economic activity in the global recession
resulting from the COVID-19 event (https://www.bls.gov/cps/employment-situation-covid19-faq-june-2020.pdf). US GDP in IQ2020 is 24.6 percent lower than at trend. US GDP
grew from $15,762.0 billion in IVQ2007
in constant dollars to $17,205.8 billion in IQ2020 or 9.2 percent at the
average annual equivalent rate of 0.7 percent. Professor John H. Cochrane
(2014Jul2) estimates US GDP at more than 10 percent below trend. Cochrane
(2016May02) measures GDP growth in the US at average 3.5 percent per year from
1950 to 2000 and only at 1.76 percent per year from 2000 to 2015 with only at
2.0 percent annual equivalent in the current expansion. Cochrane (2016May02)
proposes drastic changes in regulation and legal obstacles to private economic
activity. The US missed the opportunity to grow at higher rates during the
expansion and it is difficult to catch up because growth rates in the final
periods of expansions tend to decline. The US missed the opportunity for
recovery of output and employment always afforded in the first four quarters of
expansion from recessions. Zero interest rates and quantitative easing were not
required or present in successful cyclical expansions and in secular economic growth
at 3.0 percent per year and 2.0 percent per capita as measured by Lucas
(2011May). There is cyclical uncommonly
slow growth in the US instead of allegations of secular stagnation. There is similar behavior in manufacturing.
There is classic research on analyzing deviations of output from trend (see for
example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977). The
long-term trend is growth of manufacturing at average 2.9 percent per year from
Jun 1919 to Jun 2020. Growth at 2.9 percent per year would raise the NSA index
of manufacturing output (SIC, Standard Industrial Classification) from 108.2987
in Dec 2007 to 154.8159 in Jun 2020. The actual index NSA in Jun 2020 is 95.097
which is 38.6 percent below trend. The underperformance of manufacturing in Jun
2020 originates partly in the earlier global recession augmented by the current
global recession with output in the US reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the
lockdown of economic activity in the COVID-19. Manufacturing grew at the
average annual rate of 3.3 percent between Dec 1986 and Dec 2006. Growth at 3.3
percent per year would raise the NSA index of manufacturing output (SIC,
Standard Industrial Classification) from 108.2987 in Dec 2007 to 162.5089 in
Jun 2020. The actual index NSA in Jun 2020 is 95.0970, which is 41.5 percent
below trend. Manufacturing output grew at average 1.6 percent between Dec 1986
and Jun 2020. Using trend growth of 1.6 percent per year, the index would
increase to 132.0671 in Jun 2020. The output of manufacturing at 95.0970 in Jun
2020 is 28.0 percent below trend under this alternative calculation. Using the NAICS (North American Industry Classification
System), manufacturing output fell from the high of 110.5147 in Jun 2007 to the
low of 86.3800 in Apr 2009 or 21.8 percent. The NAICS manufacturing index
increased from 86.3800 in Apr 2009 to 96.1857 in Jun 2020 or 11.4 percent. The
NAICS manufacturing index increased at the annual equivalent rate of 3.5
percent from Dec 1986 to Dec 2006. Growth at 3.5 percent would increase the
NAICS manufacturing output index from 106.6777 in Dec 2007 to 163.9940 in Jun
2020. The NAICS index at 96.1857 in Jun 2020 is 41.3 below trend. The NAICS
manufacturing output index grew at 1.7 percent annual equivalent from Dec 1999
to Dec 2006. Growth at 1.7 percent would raise the NAICS manufacturing output
index from 106.6777 in Dec 2007 to 131.6999 in Jun 2020. The NAICS index at
96.1857 in Jun 2020 is 27.0 percent below trend under this alternative
calculation. Table I-13 provides national income by industry without capital
consumption adjustment (WCCA). “Private industries” or economic activities have
share of 87.2 percent in IIQ2020. Most of US national income is in the form of
services. In Jun 2020, there were 138.513 million nonfarm jobs NSA in the US,
according to estimates of the establishment survey of the Bureau of Labor
Statistics (BLS) (https://www.bls.gov/news.release/empsit.nr0.htm Table B-1). Total private jobs of 117.360 million NSA
in Jun 2020 accounted for 84.7 percent of total nonfarm jobs of 138.513
million, of which 12.169 million, or 10.4 percent of total private jobs and 8.8
percent of total nonfarm jobs, were in manufacturing. Private service-providing
jobs were 97.204 million NSA in Jun 2020, or 70.2 percent of total nonfarm jobs
and 82.8 percent of total private-sector jobs. Manufacturing has share of 9.2 percent in US national income in
IQ2020 and durable goods 5.5 percent, as shown in Table I-13. Most income in
the US originates in services. Subsidies and similar measures designed to
increase manufacturing jobs will not increase economic growth and employment
and may actually reduce growth by diverting resources away from currently
employment-creating activities because of the drain of taxation.
Table I-13, US, National Income without Capital Consumption
Adjustment by Industry, Seasonally Adjusted Annual Rates, Billions of Dollars,
% of Total
|
SAAR IVQ2019
|
% Total
|
SAAR IQ2020
|
% Total
|
|
|
National Income WCCA
|
18,173.6
|
100.0
|
18,096.0
|
100.0
|
|
Domestic Industries
|
17,892.6
|
98.5
|
17,852.8
|
98.7
|
|
Private Industries
|
15,815.8
|
87.0
|
15,770.9
|
87.2
|
|
Agriculture
|
145.3
|
0.8
|
147.4
|
0.8
|
|
Mining
|
176.3
|
1.0
|
155.4
|
0.9
|
|
Utilities
|
207.0
|
1.1
|
204.1
|
1.1
|
|
Construction
|
946.1
|
5.2
|
954.2
|
5.3
|
|
Manufacturing
|
1702.4
|
9.4
|
1672.1
|
9.2
|
|
Durable Goods
|
1007.7
|
5.5
|
995.6
|
5.5
|
|
Nondurable Goods
|
694.7
|
3.8
|
676.5
|
3.7
|
|
Wholesale Trade
|
1015.0
|
5.6
|
1011.0
|
5.6
|
|
Retail Trade
|
1210.6
|
6.7
|
1205.5
|
6.7
|
|
Transportation & WH
|
604.3
|
3.3
|
588.9
|
3.3
|
|
Information
|
686.5
|
3.8
|
692.4
|
3.8
|
|
Finance, Insurance, RE
|
3183.6
|
17.5
|
3193.6
|
17.6
|
|
Professional & Business Services
|
2716.9
|
14.9
|
2740.0
|
15.1
|
|
Education, Health Care
|
1864.2
|
10.3
|
1871.2
|
10.3
|
|
Arts, Entertainment
|
821.9
|
4.5
|
796.4
|
4.4
|
|
Other Services
|
535.5
|
2.9
|
538.7
|
3.0
|
|
Government
|
2076.8
|
11.4
|
2081.9
|
11.5
|
|
Rest of the World
|
281.1
|
1.5
|
243.2
|
1.3
|
Notes: SSAR: Seasonally-Adjusted Annual Rate; Percentages
Calculates from Unrounded Data; WCCA: Without Capital Consumption Adjustment by
Industry; WH: Warehousing; RE, includes rental and leasing: Real Estate; Art,
Entertainment includes recreation, accommodation and food services; BS:
business services
Source: US Bureau of Economic Analysis
© Carlos M. Pelaez, 2009,
2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020.
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