Dollar Carry Trades Induced from Zero Interest Rates to Risk Financial Assets, Mediocre Cyclical United States Economic Growth with GDP Five Trillion Dollars below Trend in the Lost Economic Cycle of the Global Recession with Economic Growth Underperforming Below Trend Worldwide, Cyclically Stagnating Real Private Fixed Investment, Swelling Undistributed Corporate Profits, United States Terms of International Trade, United States Housing, United States House Prices, 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
IA1
Stagnating Real Private Fixed Investment
IA2
Swelling Undistributed Corporate Profits
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
I Mediocre Cyclical United States
Economic Growth with GDP Five Trillion Dollars below Trend. IA Mediocre
Cyclical United States Economic Growth provides the analysis of long-term
and cyclical growth of GDP in the US with GDP Five Trillion Dollars or 16.2
Percent Below trend. Section IA1 Stagnating Real Private Fixed Investment
analyzes weakness in investment in the initial part of the cycle followed by stronger performance and
recent weakness 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. Section IA2 Swelling
Undistributed Corporate Profits provides analysis of corporate profits.
Section IID United States International Terms of Trade provides data and
analysis of relative prices in US international trade.
There is socio-economic stress in the combination of adverse
events and cyclical performance:
- Mediocre economic growth
below potential and long-term trend, resulting in idle productive
resources with GDP three trillion dollars below trend (Section I and
earlier) (https://cmpassocregulationblog.blogspot.com/2020/08/d-ollar-devaluation-and-yuan.html). US GDP grew at the average rate of 3.2 percent per year from
1929 to 2019, with similar performance in whole cycles of contractions and
expansions, but only at 1.7 percent per year on average from 2007 to 2019.
GDP in IIQ2020 is 24.1 percent lower than what it would have been had it
grown at trend of 3.0 percent
- Private fixed investment
stagnating initially followed by cumulative increase of 17.7 percent in
the entire cycle from IVQ2007 to IIQ2020 (Section
I and earlier) (https://cmpassocregulationblog.blogspot.com/2020/08/d-ollar-devaluation-and-yuan.html).
- Thirty-five million or
20.2 percent of the effective labor force unemployed or underemployed in involuntary part-time
jobs with cyclically stagnating or declining real wages (https://cmpassocregulationblog.blogspot.com/2020/09/exchange-rate-fluctuations-1.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/08/thirty-eight-million-unemployed-or.html
and earlier 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
and earlier https://cmpassocregulationblog.blogspot.com/2020/05/fifty-two-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/04/lockdown-of-economic-activity-in.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/03/stress-of-world-financial-markets-fomc.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/02/increasing-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/01/rising-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/12/increase-in-valuations-of-risk.html and earlier https://cmpassocregulationblog.blogspot.com/2019/11/increasing-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/10/volatility-of-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/09/increase-in-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/08/dollar-appreciation-contraction-of.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/07/twenty-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/06/increase-of-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/05/fluctuating-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/04/flattening-yield-curve-of-treasury.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/03/dollar-revaluation-twenty-one-million.html and earlier https://cmpassocregulationblog.blogspot.com/2019/02/wait-and-see-patient-forecast-dependent.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/01/the-fed-will-be-patient-adjusting.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/12/fluctuation-of-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/11/fluctuations-of-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/10/twenty-one-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/09/twenty-on00000000e-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/08/fomc-policy-rate-unchanged-competitive.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/07/twenty-one-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/06/twenty-one-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2018/05/twenty-one-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/04/twenty-two-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/03/twenty-three-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/02/twenty-four-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/01/twenty-three-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/12/twenty-one-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/11/unchanged-fomc-policy-rate-gradual.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/10/twenty-one-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/09/twenty-two-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/08/data-dependent-monetary-policy-with.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/07/rising-yields-twenty-two-million.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/06/twenty-two-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/05/twenty-two-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/04/twenty-three-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/03/increasing-interest-rates-twenty-four.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/02/twenty-six-million-unemployed-or.html
and earlier http://cmpassocregulationblog.blogspot.com/2017/01/twenty-four-million-unemployed-or.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/12/rising-yields-and-dollar-revaluation.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/11/the-case-for-increase-in-federal-funds.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/10/twenty-four-million-unemployed-or.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/09/interest-rates-and-valuations-of-risk.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/08/global-competitive-easing-or.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/07/fluctuating-valuations-of-risk.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/06/financial-turbulence-twenty-four.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/05/twenty-four-million-unemployed-or.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/04/proceeding-cautiously-in-monetary.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/03/twenty-five-million-unemployed-or.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/02/fluctuating-risk-financial-assets-in.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/01/weakening-equities-with-exchange-rate.html
and earlier (http://cmpassocregulationblog.blogspot.com/2015/12/liftoff-of-fed-funds-rate-followed-by.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/11/live-possibility-of-interest-rates.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/10/labor-market-uncertainty-and-interest.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/09/interest-rate-policy-dependent-on-what.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/08/fluctuating-risk-financial-assets.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/07/turbulence-of-financial-asset.html)
- Stagnating real
disposable income per person or income per person after inflation and
taxes (https://cmpassocregulationblog.blogspot.com/2020/09/exchange-rate-fluctuations-1.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/08/thirty-eight-million-unemployed-or.html
and earlier 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
and earlier https://cmpassocregulationblog.blogspot.com/2020/05/fifty-two-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/04/lockdown-of-economic-activity-in.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/03/stress-of-world-financial-markets-fomc.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/02/increasing-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/01/increasing-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/12/increase-in-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/11/increasing-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/10/volatility-of-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/09/increase-in-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/08/dollar-appreciation-contraction-of.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/07/twenty-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/06/increase-of-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/05/fluctuating-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/04/flattening-yield-curve-of-treasury.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/03/dollar-revaluation-twenty-one-million.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/12/mediocre-cyclical-united-states.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/12/fluctuation-of-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/11/fluctuations-of-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/09/fomc-increases-policy-interest-rate.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/09/revision-of-united-states-national.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/09/twenty-one-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/08/revision-of-united-states-national.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/08/fomc-policy-rate-unchanged-competitive.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/07/twenty-one-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/06/stronger-dollar-mediocre-cyclical.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/05/twenty-one-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/04/twenty-two-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/04/twenty-two-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/03/twenty-three-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/02/twenty-four-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/12/dollar-devaluation-cyclically.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/12/twenty-one-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/11/unchanged-fomc-policy-rate-gradual.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/10/twenty-one-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/09/twenty-two-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/08/data-dependent-monetary-policy-with.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/07/rising-yields-twenty-two-million.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/06/twenty-two-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/05/twenty-two-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/04/twenty-three-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/03/rising-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/02/twenty-six-million-unemployed-or.html
and earlier http://cmpassocregulationblog.blogspot.com/2017/01/twenty-four-million-unemployed-or.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/12/rising-yields-and-dollar-revaluation.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/12/mediocre-cyclical-united-states.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/12/rising-yields-and-dollar-revaluation.html and
earlier http://cmpassocregulationblog.blogspot.com/2016/11/the-case-for-increase-in-federal-funds.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/11/the-case-for-increase-in-federal-funds.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/10/twenty-four-million-unemployed-or.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/09/interest-rates-and-valuations-of-risk.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/08/global-competitive-easing-or.html
and earlier (http://cmpassocregulationblog.blogspot.com/2016/07/financial-asset-values-rebound-from.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/06/financial-turbulence-twenty-four.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/05/twenty-four-million-unemployed-or.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/04/proceeding-cautiously-in-monetary.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/03/twenty-five-million-unemployed-or.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/03/twenty-five-million-unemployed-or.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/02/fluctuating-risk-financial-assets-in.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/12/dollar-revaluation-and-decreasing.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/11/dollar-revaluation-constraining.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/11/dollar-revaluation-constraining.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/11/live-possibility-of-interest-rates.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/10/labor-market-uncertainty-and-interest.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/09/interest-rate-policy-dependent-on-what.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/08/fluctuating-risk-financial-assets.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/06/international-valuations-of-financial.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/06/higher-volatility-of-asset-prices-at.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/04/volatility-of-valuations-of-financial.html)
- Depressed hiring that
does not afford an opportunity for reducing unemployment/underemployment
and moving to better-paid jobs (https://cmpassocregulationblog.blogspot.com/2020/09/new-nonfarm-hires-of-6.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/08/nonfarm-hires-jump-64.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/07/collapse-of-united-states-dynamism-of.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/06/global-recession-with-output-in-us.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/05/recovery-without-hiring-twenty-million.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/04/united-states-imbalances-of-internal.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/03/sharp-contraction-of-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/02/recovery-without-hiring-in-lost.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/01/declining-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/12/oscillating-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/11/increasing-valuations-of-risk-financial_16.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/10/increasing-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/09/competitive-exchange-rate-and-interest.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/08/competitive-exchange-rate-policies.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/07/fomc-uncertain-outlook-frank-h-knights.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/06/recovery-without-hiring-ten-million.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/05/contracting-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/04/recovery-without-hiring-labor.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/03/inverted-yield-curve-of-treasury.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/02/dollar-revaluation-with-increases-in.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/01/recovery-without-hiring-labor.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/12/mediocre-cyclical-united-states.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/12/slowing-world-economic-growth-and.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/11/oscillation-of-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/10/oscillation-of-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/09/recovery-without-hiring-in-lost.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/08/dollar-revaluation-recovery-without.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/07/recovery-without-hiring-ten-million.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/06/twenty-one-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/05/recovery-without-hiring-ten-million.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/04/rising-yields-world-inflation-waves.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/03/decreasing-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/02/collateral-effects-of-unwinding.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/01/dollar-devaluation-and-rising.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/12/fomc-increases-interest-rates-with.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/11/recovery-without-hiring-ten-million.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/10/increasing-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/09/dollar-devaluation-world-inflation.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/08/recovery-without-hiring-ten-million_40.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/07/dollar-devaluation-and-valuation-of.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/06/flattening-us-treasury-yield-curve.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/05/recovery-without-hiring-ten-million_14.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/04/world-inflation-waves-united-states.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/03/recovery-without-hiring-ten-million.html and
earlier https://cmpassocregulationblog.blogspot.com/2017/02/recovery-without-hiring-ten-million.html
and earlier http://cmpassocregulationblog.blogspot.com/2017/01/unconventional-monetary-policy-and.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/12/rising-values-of-risk-financial-assets.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/11/dollar-revaluation-and-valuations-of.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/10/imf-view-of-world-economy-and-finance.html and earlier http://cmpassocregulationblog.blogspot.com/2016/09/interest-rate-uncertainty-and-valuation.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/08/rising-valuations-of-risk-financial.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/07/oscillating-valuations-of-risk.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/06/considerable-uncertainty-about-economic.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/05/recovery-without-hiring-ten-million.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/04/proceeding-cautiously-in-reducing.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/03/contraction-of-united-states-corporate.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/02/subdued-foreign-growth-and-dollar.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/01/unconventional-monetary-policy-and.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/12/liftoff-of-interest-rates-with-volatile_17.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/11/interest-rate-policy-conundrum-recovery.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/10/impact-of-monetary-policy-on-exchange.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/09/interest-rate-policy-dependent-on-what_13.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/08/exchange-rate-and-financial-asset.html and earlier http://cmpassocregulationblog.blogspot.com/2015/07/oscillating-valuations-of-risk.html and
earlier http://cmpassocregulationblog.blogspot.com/2015/06/volatility-of-financial-asset.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/06/volatility-of-financial-asset.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/05/fluctuating-valuations-of-financial.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/04/dollar-revaluation-recovery-without.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/03/global-exchange-rate-struggle-recovery.html
and earlier (http://cmpassocregulationblog.blogspot.com/2015/02/g20-monetary-policy-recovery-without.html)
- Productivity growth fell
from 2.1 percent per year on average from 1947 to 2019 and average 2.3
percent per year from 1947 to 2007 to 1.4 percent per year on average from
2007 to 2019, deteriorating future growth and prosperity (https://cmpassocregulationblog.blogspot.com/2020/05/united-states-inflation-rules.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/03/financial-markets-stress-in.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/02/recovery-without-hiring-in-lost.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/12/increase-in-valuations-of-risk_14.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/11/fluctuating-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/09/uncertain-fomc-outlook-of-monetary.html
and earlier (https://cmpassocregulationblog.blogspot.com/2019/08/contraction-of-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/06/recovery-without-hiring-ten-million.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/03/increasing-valuations-of-risk-financial.html and earlier https://cmpassocregulationblog.blogspot.com/2018/12/increase-of-interest-rates-by-monetary.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/11/weaker-world-economic-growth-with.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/09/recovery-without-hiring-in-lost.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/08/revision-of-united-states-national.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/06/fomc-increases-interest-rates-with.html
and earlier (https://cmpassocregulationblog.blogspot.com/2018/05/recovery-without-hiring-ten-million.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/03/united-states-inflation-united-states.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/02/collateral-effects-of-unwinding.html
and earlier (https://cmpassocregulationblog.blogspot.com/2017/12/fomc-increases-interest-rates-with.html
and earlier (https://cmpassocregulationblog.blogspot.com/2017/11/recovery-without-hiring-ten-million.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/09/ii-rules-discretionary-authorities-and.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/08/recovery-without-hiring-ten-million_40.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/06/flattening-us-treasury-yield-curve.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/05/recovery-without-hiring-ten-million_14.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/03/increasing-interest-rates-twenty-four.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/12/rising-values-of-risk-financial-assets.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/11/the-case-for-increase-in-federal-funds.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/09/interest-rates-and-valuations-of-risk.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/08/rising-valuations-of-risk-financial.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/06/considerable-uncertainty-about-economic.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/05/twenty-four-million-unemployed-or.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/03/twenty-five-million-unemployed-or.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/01/closely-monitoring-global-economic-and.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/12/liftoff-of-fed-funds-rate-followed-by.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/11/live-possibility-of-interest-rates.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/09/interest-rate-policy-dependent-on-what.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/08/exchange-rate-and-financial-asset.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/06/higher-volatility-of-asset-prices-at.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/05/quite-high-equity-valuations-and.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/03/global-competitive-devaluation-rules.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html
and earlier http://cmpassocregulationblog.blogspot.com/2014/12/financial-risks-twenty-six-million.html)
- Output of manufacturing
(SIC) in Aug 2020 at 36.2 percent below long-term trend since 1919 and at
26.0 percent below trend since 1986. Output of manufacturing (NAICS) at
39.1 percent below trend measured from 1986 to 2006 and 24.0 percent below
trend measured from 1999 to 2006 (https://cmpassocregulationblog.blogspot.com/2020/09/federal-open-market-committee-leaves.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/08/us-industrial-production-increased-3.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/07/growth-of-industrial-production-of-54.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/06/recovery-in-jun-2020-of-manufacturing.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/05/recovery-without-hiring-twenty-million.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/04/contraction-of-united-states.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/03/sharp-contraction-of-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/02/declining-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/01/declining-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/12/diverging-economic-conditions-and.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/11/oscillating-risk-financial-assets-world.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/10/increasing-valuations-of-risk-financial_26.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/09/uncertain-fomc-outlook-of-monetary.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/08/global-decline-of-yields-of-government.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/07/global-manufacturing-stress-world.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/07/global-manufacturing-stress-world.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/06/fomc-outlook-uncertainty-central-bank.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/05/decreasing-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/04/increasing-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/03/inverted-yield-curve-of-treasury.html
and earlier (https://cmpassocregulationblog.blogspot.com/2019/02/revaluation-of-yuanus-dollar-exchange.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/01/delays-in-updating-united-states.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/12/increase-of-interest-rates-by-monetary.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/11/weaker-world-economic-growth-with.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/10/oscillation-of-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/09/world-inflation-waves-united-states.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/08/world-inflation-waves-lost-economic.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/07/continuing-gradual-increases-in-fed.html
and earlier (https://cmpassocregulationblog.blogspot.com/2018/06/world-inflation-waves-united-states.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/05/dollar-revaluation-united-states_24.html
and earlier (https://cmpassocregulationblog.blogspot.com/2018/04/rising-yields-world-inflation-waves.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/03/united-states-inflation-united-states.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/02/world-inflation-waves-united-states.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/01/dollar-devaluation-and-increasing.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/12/mediocre-cyclical-united-states_23.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/11/the-lost-economic-cycle-of-global_25.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/10/world-inflation-waves-long-term-and.html
and earlier) (https://cmpassocregulationblog.blogspot.com/2017/09/monetary-policy-of-reducing-central.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/08/fluctuating-valuations-of-risk.html
and earlier (https://cmpassocregulationblog.blogspot.com/2017/07/rising-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/06/fomc-interest-rate-increase-planned.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/05/dollar-devaluation-world-inflation.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/04/united-states-commercial-banks-assets.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/03/fomc-increases-interest-rates-world.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/02/world-inflation-waves-united-states.html
and earlier http://cmpassocregulationblog.blogspot.com/2017/01/world-inflation-waves-united-states.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/12/of-course-economic-outlook-is-highly.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/11/interest-rate-increase-could-well.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/10/dollar-revaluation-world-inflation.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/09/interest-rates-and-volatility-of-risk.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/08/interest-rate-policy-uncertainty-and.html
and earlier (http://cmpassocregulationblog.blogspot.com/2016/07/unresolved-us-balance-of-payments.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/06/fomc-projections-world-inflation-waves.html
and earlier (http://cmpassocregulationblog.blogspot.com/2016/05/most-fomc-participants-judged-that-if.html
and earlier (http://cmpassocregulationblog.blogspot.com/2016/04/contracting-united-states-industrial.html
and earlier (http://cmpassocregulationblog.blogspot.com/2016/03/monetary-policy-and-competitive.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/02/squeeze-of-economic-activity-by-carry.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/01/unconventional-monetary-policy-and.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/12/liftoff-of-interest-rates-with-monetary.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/11/interest-rate-liftoff-followed-by.html http://cmpassocregulationblog.blogspot.com/2015/10/interest-rate-policy-quagmire-world.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/09/interest-rate-increase-on-hold-because.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/08/exchange-rate-and-financial-asset.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/07/fluctuating-risk-financial-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2015/06/fluctuating-financial-asset-valuations.html and earlier http://cmpassocregulationblog.blogspot.com/2015/05/fluctuating-valuations-of-financial.html and earlier http://cmpassocregulationblog.blogspot.com/2015/04/global-portfolio-reallocations-squeeze.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/impatience-with-monetary-policy-of.html and earlier (http://cmpassocregulationblog.blogspot.com/2015/02/world-financial-turbulence-squeeze-of.html and earlier http://cmpassocregulationblog.blogspot.com/2015/01/exchange-rate-conflicts-squeeze-of.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html and earlier http://cmpassocregulationblog.blogspot.com/2014/11/squeeze-of-economic-activity-by-carry.html and earlier http://cmpassocregulationblog.blogspot.com/2014/10/imf-view-squeeze-of-economic-activity.html and earlier http://cmpassocregulationblog.blogspot.com/2014/09/world-inflation-waves-squeeze-of.html)
- Unsustainable government
deficit/debt and balance of payments deficit (https://cmpassocregulationblog.blogspot.com/2018/10/global-contraction-of-valuations-of.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/04/mediocre-cyclical-economic-growth-with.html
and earlier http://cmpassocregulationblog.blogspot.com/2017/01/twenty-four-million-unemployed-or.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/12/rising-yields-and-dollar-revaluation.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/07/unresolved-us-balance-of-payments.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/04/proceeding-cautiously-in-reducing.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/01/weakening-equities-and-dollar.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/09/monetary-policy-designed-on-measurable.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/06/fluctuating-financial-asset-valuations.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/03/impatience-with-monetary-policy-of.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html
and earlier http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html http://cmpassocregulationblog.blogspot.com/2014/09/world-inflation-waves-squeeze-of.html http://cmpassocregulationblog.blogspot.com/2014/08/monetary-policy-world-inflation-waves.html http://cmpassocregulationblog.blogspot.com/2014/06/valuation-risks-world-inflation-waves.html http://cmpassocregulationblog.blogspot.com/2014/02/theory-and-reality-of-cyclical-slow.html http://cmpassocregulationblog.blogspot.com/2014/03/interest-rate-risks-world-inflation.html http://cmpassocregulationblog.blogspot.com/2013/12/tapering-quantitative-easing-mediocre.html and earlier http://cmpassocregulationblog.blogspot.com/2013/09/duration-dumping-and-peaking-valuations.html)
- Worldwide waves of
inflation (https://cmpassocregulationblog.blogspot.com/2020/09/wealth-of-households-and-nonprofit.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/08/d-ollar-devaluation-and-yuan.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/07/contraction-of-household-wealth-by-14.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/06/mediocre-cyclical-united-states.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/06/recovery-in-jun-2020-of-manufacturing.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/05/mediocre-cyclical-united-states_31.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/04/valuations-of-risk-financial-assets.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/03/weekly-rise-of-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/02/sharp-worldwide-contraction-of.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/02/decreasing-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/12/diverging-economic-conditions-and.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/11/oscillating-risk-financial-assets-world.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/10/dollar-depreciation-fluctuating.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/09/uncertain-fomc-outlook-of-monetary.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/08/contraction-of-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/07/global-manufacturing-stress-world.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/06/fomc-outlook-uncertainty-central-bank.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/05/contraction-of-risk-financial-assets.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/04/increasing-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/03/inverted-yield-curve-of-treasury.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/02/revaluation-of-yuanus-dollar-exchange.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/01/world-inflation-waves-world-financial_24.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/12/increase-of-interest-rates-by-monetary.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/11/weakening-gdp-growth-in-major-economies.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/10/oscillation-of-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/09/world-inflation-waves-united-states.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/08/world-inflation-waves-lost-economic.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/07/continuing-gradual-increases-in-fed.html and
earlier https://cmpassocregulationblog.blogspot.com/2018/06/world-inflation-waves-united-states.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/05/dollar-strengthening-world-inflation.htm
and earlier https://cmpassocregulationblog.blogspot.com/2018/04/rising-yields-world-inflation-waves.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/03/decreasing-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/02/world-inflation-waves-united-states.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/01/dollar-devaluation-and-increasing.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/12/fomc-increases-interest-rates-with.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/11/dollar-devaluation-and-decline-of.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/10/world-inflation-waves-long-term-and.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/09/dollar-devaluation-world-inflation.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/08/fluctuating-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/07/dollar-devaluation-and-valuation-of.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/06/fomc-interest-rate-increase-planned.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/05/dollar-devaluation-world-inflation.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/04/world-inflation-waves-united-states.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/03/fomc-increases-interest-rates-world.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/02/world-inflation-waves-united-states.html
and earlier http://cmpassocregulationblog.blogspot.com/2017/01/world-inflation-waves-united-states.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/12/of-course-economic-outlook-is-highly.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/11/interest-rate-increase-could-well.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/10/dollar-revaluation-world-inflation.html
and earlier (http://cmpassocregulationblog.blogspot.com/2016/09/interest-rates-and-volatility-of-risk.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/08/interest-rate-policy-uncertainty-and.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/07/oscillating-valuations-of-risk.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/06/fomc-projections-world-inflation-waves.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/05/most-fomc-participants-judged-that-if.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/04/contracting-united-states-industrial.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/03/monetary-policy-and-competitive.html and earlier http://cmpassocregulationblog.blogspot.com/2016/02/squeeze-of-economic-activity-by-carry.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/01/uncertainty-of-valuations-of-risk.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/12/liftoff-of-interest-rates-with-monetary.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/11/interest-rate-liftoff-followed-by.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/10/interest-rate-policy-quagmire-world.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/09/interest-rate-increase-on-hold-because.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/08/global-decline-of-values-of-financial.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/07/fluctuating-risk-financial-assets.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/06/fluctuating-financial-asset-valuations.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/05/interest-rate-policy-and-dollar.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/04/global-portfolio-reallocations-squeeze.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/01/competitive-currency-conflicts-world.html
and earlier http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html
and earlier (http://cmpassocregulationblog.blogspot.com/2014/11/squeeze-of-economic-activity-by-carry.html
and earlier http://cmpassocregulationblog.blogspot.com/2014/10/financial-oscillations-world-inflation.html http://cmpassocregulationblog.blogspot.com/2014/09/world-inflation-waves-squeeze-of.html
and earlier http://cmpassocregulationblog.blogspot.com/2014/08/monetary-policy-world-inflation-waves.html http://cmpassocregulationblog.blogspot.com/2014/07/world-inflation-waves-united-states.html)
- Deteriorating terms of
trade and net revenue margins of production across countries in squeeze of
economic activity by carry trades induced by zero interest rates (https://cmpassocregulationblog.blogspot.com/2020/09/federal-open-market-committee-leaves.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/08/us-industrial-production-increased-3.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/07/growth-of-industrial-production-of-54.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/06/recovery-in-jun-2020-of-manufacturing.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/05/recovery-without-hiring-twenty-million.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/04/contraction-of-united-states.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/03/sharp-contraction-of-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/02/declining-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/01/declining-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/12/diverging-economic-conditions-and.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/11/oscillating-risk-financial-assets-world.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/10/increasing-valuations-of-risk-financial_26.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/09/uncertain-fomc-outlook-of-monetary.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/08/global-decline-of-yields-of-government.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/07/global-manufacturing-stress-world.html and earlier https://cmpassocregulationblog.blogspot.com/2019/06/fomc-outlook-uncertainty-central-bank.html and earlier https://cmpassocregulationblog.blogspot.com/2019/05/decreasing-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/04/increasing-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/03/inverted-yield-curve-of-treasury.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/02/revaluation-of-yuanus-dollar-exchange.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/01/delays-in-updating-united-states.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/12/increase-of-interest-rates-by-monetary.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/11/weaker-world-economic-growth-with.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/10/oscillation-of-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/09/world-inflation-waves-united-states.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/08/world-inflation-waves-lost-economic.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/07/continuing-gradual-increases-in-fed.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/06/world-inflation-waves-united-states.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/05/dollar-revaluation-united-states_24.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/04/rising-yields-world-inflation-waves.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/03/decreasing-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/03/united-states-inflation-united-states.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/02/world-inflation-waves-united-states.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/01/dollar-devaluation-and-increasing.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/12/mediocre-cyclical-united-states_23.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/11/the-lost-economic-cycle-of-global_25.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/10/world-inflation-waves-long-term-and.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/09/monetary-policy-of-reducing-central.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/08/fluctuating-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/07/dollar-devaluation-and-valuation-of.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/06/fomc-interest-rate-increase-planned.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/05/dollar-devaluation-world-inflation.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/04/united-states-commercial-banks-assets.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/03/fomc-increases-interest-rates-world.html
and earlier http://cmpassocregulationblog.blogspot.com/2017/01/world-inflation-waves-united-states.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/12/of-course-economic-outlook-is-highly.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/11/interest-rate-increase-could-well.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/10/dollar-revaluation-world-inflation.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/09/interest-rates-and-volatility-of-risk.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/07/unresolved-us-balance-of-payments.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/06/fomc-projections-world-inflation-waves.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/05/most-fomc-participants-judged-that-if.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/04/imf-view-of-world-economy-and-finance.html
and earlier) (http://cmpassocregulationblog.blogspot.com/2016/03/monetary-policy-and-competitive.html and earlier http://cmpassocregulationblog.blogspot.com/2016/02/squeeze-of-economic-activity-by-carry.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/01/uncertainty-of-valuations-of-risk.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/12/liftoff-of-interest-rates-with-monetary.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/11/interest-rate-liftoff-followed-by.html http://cmpassocregulationblog.blogspot.com/2015/10/interest-rate-policy-quagmire-world.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/09/interest-rate-increase-on-hold-because.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/08/global-decline-of-values-of-financial.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/07/fluctuating-risk-financial-assets.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/06/fluctuating-financial-asset-valuations.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/04/global-portfolio-reallocations-squeeze.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/03/impatience-with-monetary-policy-of.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/02/world-financial-turbulence-squeeze-of.html http://cmpassocregulationblog.blogspot.com/2015/01/exchange-rate-conflicts-squeeze-of.html
and earlier http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html
and earlier http://cmpassocregulationblog.blogspot.com/2014/11/squeeze-of-economic-activity-by-carry.html
and earlier http://cmpassocregulationblog.blogspot.com/2014/10/imf-view-squeeze-of-economic-activity.html
and earlier http://cmpassocregulationblog.blogspot.com/2014/09/world-inflation-waves-squeeze-of.html
- Financial repression of
interest rates and credit affecting the most people without means and
access to sophisticated financial investments with likely adverse effects
on income distribution and wealth disparity (https://cmpassocregulationblog.blogspot.com/2020/09/exchange-rate-fluctuations-1.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/08/thirty-eight-million-unemployed-or.html
and earlier 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
and earlier https://cmpassocregulationblog.blogspot.com/2020/05/fifty-two-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/04/lockdown-of-economic-activity-in.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/04/lockdown-of-economic-activity-in.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/03/stress-of-world-financial-markets-fomc.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/02/increasing-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2020/01/increasing-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/12/increase-in-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/11/increasing-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/10/volatility-of-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/09/increase-in-valuations-of-risk.html
and earlier (https://cmpassocregulationblog.blogspot.com/2019/08/dollar-appreciation-contraction-of.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/07/twenty-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/06/contraction-of-risk-financial-assets.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/05/fluctuating-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/04/flattening-yield-curve-of-treasury.html
and earlier https://cmpassocregulationblog.blogspot.com/2019/03/dollar-revaluation-twenty-one-million.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/12/mediocre-cyclical-united-states.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/12/fluctuation-of-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/11/fluctuations-of-valuations-of-risk.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/09/fomc-increases-policy-interest-rate.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/09/revision-of-united-states-national.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/09/twenty-one-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/08/revision-of-united-states-national.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/07/twenty-one-million-unemployed-or.html and
earlier https://cmpassocregulationblog.blogspot.com/2018/06/stronger-dollar-mediocre-cyclical.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/05/twenty-one-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/04/twenty-two-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/04/twenty-two-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2018/03/twenty-three-million-unemployed-or.html
and earlier (https://cmpassocregulationblog.blogspot.com/2018/02/twenty-four-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/12/dollar-devaluation-cyclically.html
and earlier (https://cmpassocregulationblog.blogspot.com/2017/12/twenty-one-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/11/unchanged-fomc-policy-rate-gradual.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/10/twenty-one-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/09/twenty-two-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/08/data-dependent-monetary-policy-with.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/07/rising-yields-twenty-two-million.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/06/twenty-two-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/05/twenty-two-million-unemployed-or.html
and earlier (https://cmpassocregulationblog.blogspot.com/2017/04/twenty-three-million-unemployed-or.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/03/rising-valuations-of-risk-financial.html
and earlier https://cmpassocregulationblog.blogspot.com/2017/02/twenty-six-million-unemployed-or.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/12/mediocre-cyclical-united-states.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/12/rising-yields-and-dollar-revaluation.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/11/the-case-for-increase-in-federal-funds.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/11/the-case-for-increase-in-federal-funds.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/10/twenty-four-million-unemployed-or.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/09/interest-rates-and-valuations-of-risk.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/08/global-competitive-easing-or.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/07/financial-asset-values-rebound-from.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/06/financial-turbulence-twenty-four.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/05/twenty-four-million-unemployed-or.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/04/proceeding-cautiously-in-monetary.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/03/twenty-five-million-unemployed-or.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/03/twenty-five-million-unemployed-or.html
and earlier http://cmpassocregulationblog.blogspot.com/2016/01/closely-monitoring-global-economic-and.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/12/dollar-revaluation-and-decreasing.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/11/dollar-revaluation-constraining.html
and earlier (http://cmpassocregulationblog.blogspot.com/2015/11/live-possibility-of-interest-rates.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/10/labor-market-uncertainty-and-interest.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/09/interest-rate-policy-dependent-on-what.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/08/fluctuating-risk-financial-assets.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/06/international-valuations-of-financial.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/06/higher-volatility-of-asset-prices-at.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/04/volatility-of-valuations-of-financial.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/03/global-competitive-devaluation-rules.html
and earlier http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html
and earlier (http://cmpassocregulationblog.blogspot.com/2014/12/valuations-of-risk-financial-assets.html
and earlier http://cmpassocregulationblog.blogspot.com/2014/11/valuations-of-risk-financial-assets.html
and earlier http://cmpassocregulationblog.blogspot.com/2014/11/growth-uncertainties-mediocre-cyclical.html
and earlier http://cmpassocregulationblog.blogspot.com/2014/10/world-financial-turbulence-twenty-seven.html)
- 43
million in poverty and 29 million without health insurance with family
income adjusted for inflation regressing to 1999 levels (http://cmpassocregulationblog.blogspot.com/2016/09/the-economic-outlook-is-inherently.html and earlier http://cmpassocregulationblog.blogspot.com/2015/10/interest-rate-policy-uncertainty-imf.html and earlier http://cmpassocregulationblog.blogspot.com/2014/09/financial-volatility-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2013/09/duration-dumping-and-peaking-valuations.html)
- Net
worth of households and nonprofits organizations increasing by 37.2
percent after adjusting for inflation in the entire cycle from IVQ2007 to
IIQ2020 when it would have grown over 48.3 percent at trend of 3.2 percent
per year in real terms from IVQ1945 to IIQ2020. Financial assets increased
$39.9 trillion while nonfinancial assets increased $10.3 trillion with
likely concentration of wealth in those with access to sophisticated
financial investments. Real estate assets adjusted for inflation increased
8.9 percent (https://cmpassocregulationblog.blogspot.com/2020/09/wealth-of-households-and-nonprofit.html and earlier https://cmpassocregulationblog.blogspot.com/2020/07/contraction-of-household-wealth-by-14.html and earlier https://cmpassocregulationblog.blogspot.com/2020/04/contraction-of-united-states.html and earlier https://cmpassocregulationblog.blogspot.com/2020/01/increasing-valuations-of-risk-financial.html and earlier https://cmpassocregulationblog.blogspot.com/2019/09/dollar-appreciation-decreasing.html and earlier https://cmpassocregulationblog.blogspot.com/2019/06/mediocre-cyclical-united-states.html and earlier https://cmpassocregulationblog.blogspot.com/2019/03/inverted-yield-curve-of-treasury_30.html and earlier https://cmpassocregulationblog.blogspot.com/2019/01/recovery-without-hiring-labor.html and earlier https://cmpassocregulationblog.blogspot.com/2018/09/fomc-increases-policy-interest-rate.html and earlier https://cmpassocregulationblog.blogspot.com/2018/06/world-inflation-waves-united-states.html and earlier https://cmpassocregulationblog.blogspot.com/2018/03/mediocre-cyclical-united-states_31.html and earlier https://cmpassocregulationblog.blogspot.com/2017/12/dollar-devaluation-cyclically.html and earlier https://cmpassocregulationblog.blogspot.com/2017/10/destruction-of-household-nonfinancial.html and earlier https://cmpassocregulationblog.blogspot.com/2017/06/united-states-commercial-banks-united.html and earlier (https://cmpassocregulationblog.blogspot.com/2017/03/recovery-without-hiring-ten-million.html and earlier http://cmpassocregulationblog.blogspot.com/2017/01/rules-versus-discretionary-authorities.html and earlier http://cmpassocregulationblog.blogspot.com/2016/09/the-economic-outlook-is-inherently.html and earlier http://cmpassocregulationblog.blogspot.com/2016/06/of-course-considerable-uncertainty.html and earlier http://cmpassocregulationblog.blogspot.com/2016/03/monetary-policy-and-fluctuations-of_13.html and earlier http://cmpassocregulationblog.blogspot.com/2016/01/weakening-equities-and-dollar.html and earlier http://cmpassocregulationblog.blogspot.com/2015/09/monetary-policy-designed-on-measurable.html and earlier http://cmpassocregulationblog.blogspot.com/2015/06/fluctuating-financial-asset-valuations.html and earlier http://cmpassocregulationblog.blogspot.com/2015/03/dollar-revaluation-and-financial-risk.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/valuations-of-risk-financial-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2014/09/financial-volatility-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2014/06/financial-indecision-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2014/03/global-financial-risks-recovery-without.html and earlier http://cmpassocregulationblog.blogspot.com/2013/12/collapse-of-united-states-dynamism-of.html).
The Bureau of Economic Analysis revised the national accounts of
the United States since 1929 (https://www.bea.gov/newsreleases/national/gdp/2018/pdf/gdp2q18_adv.pdf):
“Comprehensive Update of the National Income and
Product Accounts The estimates released today also reflect the results of the
15th comprehensive update of the National Income and Product Accounts (NIPAs).
The updated estimates reflect previously announced improvements, and include
the introduction of new not seasonally adjusted estimates for GDP, GDI, and
their major components. For more information, see the Technical Note. Revised
NIPA table stubs, initial results, and background materials are available on
the BEA Web site.” The Bureau of Economic Analysis provided the annual revision
of the national product accounts in the release of the first estimate or
advanced estimate of IIQ2019 GDP (https://www.bea.gov/system/files/2019-07/gdp2q19_adv.pdf): “The estimates released today also reflect the results of
the Annual Update of the National Income and
Product Accounts (NIPAs). The update covers the first
quarter of 2014 through the first quarter of 2019.” The Bureau of Economic Analysis provides
the annual revision of the national product accounts in the release of the
first estimate or advanced estimate of IIQ2020 GDP (https://www.bea.gov/sites/default/files/2020-07/gdp2q20_adv.pdf): “The estimates released today also reflect the results of
the Annual Update of the National Income and
Product Accounts (NIPAs).
The timespan of the update is the first quarter of 2015 through the fourth
quarter of 2019 for estimates of real GDP and its major components, and the
first quarter of 1999 through the fourth quarter of 2019 for estimates of
income and saving. The reference year remains 2012. More information on the
2020 Annual Update is included in the May Survey of Current Business
article, “GDP and the Economy.””
Long-term economic performance in the United States consisted of
trend growth of GDP at 3 percent per year and of per capita GDP at 2 percent
per year as measured for 1870 to 2010 by Robert E Lucas (2011May). The economy
returned to trend growth after adverse events such as wars and recessions. The
key characteristic of adversities such as recessions was much higher rates of
growth in expansion periods that permitted the economy to recover output,
income and employment losses that occurred during the contractions. Over the
business cycle, the economy compensated the losses of contractions with higher
growth in expansions to maintain trend growth of GDP of 3 percent and of GDP
per capita of 2 percent. 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
third estimate of GDP for IIQ2020 (https://www.bea.gov/sites/default/files/2020-09/gdp2q20_3rd.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/2020/08/d-ollar-devaluation-and-yuan.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/2020/08/d-ollar-devaluation-and-yuan.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 $5505.1 billion than
actual $17,302.5 billion. There are more than five trillion dollars of GDP less
than at trend, explaining the 34.8 million unemployed or underemployed
equivalent to actual unemployment/underemployment of 20.2 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/2020/09/exchange-rate-fluctuations-1.html and earlier https://cmpassocregulationblog.blogspot.com/2020/08/thirty-eight-million-unemployed-or.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 IIQ2020 is 24.1 percent lower than at trend. US GDP
grew from $15,762.0 billion in IVQ2007 in constant dollars to $17,302.5
billion in IIQ2020 or 9.8 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 Aug 1919 to Aug
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
155.5554 in Aug 2020. The actual index NSA in Aug 2020 is 99.2841 which is 36.2
percent below trend. The underperformance of manufacturing in Mar-Aug 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 163.3909 in
Aug 2020. The actual index NSA in Aug 2020 is 99.2841, which is 39.2 percent
below trend. Manufacturing output grew at average 1.7 percent between Dec 1986
and Aug 2020. Using trend growth of 1.7 percent per year, the index would
increase to 134.0774 in Aug 2020. The output of manufacturing at 99.2841 in Aug
2020 is 26.0 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 100.4257 in Aug 2020 or 16.3 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 164.9372 in Aug
2020. The NAICS index at 100.4257 in Aug 2020 is 39.1 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 132.0705 in Aug 2020. The NAICS index at
100.4257 in Aug 2020 is 24.0 percent below trend under this alternative
calculation.
The economy
of the US can be summarized in growth of economic activity or GDP as
fluctuating from mediocre growth of 2.6 percent on an annual basis in 2010 to
1.6 percent in 2011, 2.2 percent in 2012, 1.8 percent in 2013, 2.5 percent in
2014 and 3.1 percent in 2015. GDP growth was 1.7 percent in 2016 and 2.3
percent in 2017. GDP growth was 3.0 percent in 2018 and 2.2 percent in 2019.
The following calculations show that actual growth is around 1.2 percent per
year during the expansion phase. The rate of growth of 1.7 percent in the
entire cycle from 2007 to 2019 is well below 3 percent per year in trend from
1870 to 2010, which the economy of the US always attained for entire cycles in
expansions after events such as wars and recessions (Lucas 2011May). Revisions
and enhancements of United States GDP and personal income accounts by the
Bureau of Economic Analysis (BEA) (https://apps.bea.gov/iTable/index_nipa.cfm) provides valuable information on long-term growth and
cyclical behavior. Table Summary provides relevant data.
Table Summary, Long-term and Cyclical Growth of GDP, Real
Disposable Income and Real Disposable Income per Capita
|
GDP |
|
Long-Term |
|
|
1929-2019 |
3.2 |
|
1947-2019 |
3.2 |
|
Whole Cycles |
|
|
1980-1989 |
3.5 |
|
2006-2019 |
1.7 |
|
2007-2019 |
1.7 |
|
Cyclical Contractions ∆% |
|
|
IQ1980 to IIIQ1980, IIIQ1981 to IVQ1982 |
-4.8 |
|
IVQ2007 to IIQ2009 |
-4.0 |
|
Cyclical Expansions Average Annual Equivalent ∆% |
|
|
IQ1983 to IVQ1985 IQ1983-IQ1986 IQ1983-IIIQ1986 IQ1983-IVQ1986 IQ1983-IQ1987 IQ1983-IIQ1987 IQ1983-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 |
5.9 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 |
|
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 IV1993 |
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 |
7.9 |
|
IIIQ2009 to IIQ2020 |
1.2 |
|
First Four Quarters IIIQ2009 to IIQ2010 |
2.8 |
|
|
Real Disposable Income |
Real Disposable Income per Capita |
Long-Term |
|
|
1929-2019 |
3.2 |
2.0 |
1947-1999 |
3.7 |
2.3 |
Whole Cycles |
|
|
1980-1989 |
3.5 |
2.6 |
2006-2019 |
2.2 |
1.5 |
Source: Bureau
of Economic Analysis
https://apps.bea.gov/iTable/index_nipa.cfm
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 8.1 percent.
This growth is equivalent to 0.9 percent per year, obtained by dividing
GDP in IIQ2020 of $17,302.5 billion by GDP in IVQ2011 of $16,004.1 billion
and compounding by 4/34: {[($17,302.5/$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 9.0 percent that is
equivalent to minus 31.4 percent in a year. This is obtained by dividing
GDP in IIQ2020 of $17,302.5 billion by GDP in IIQ2019 of $19,020.6 billion
and compounding by 4/4: {[($17,302.5/$19,020.6)4/4 -1]100 = -9.0%}.
The US economy decreased 9.0 percent in IIQ2020 relative to the same
quarter a year earlier in IIQ2019 (See Table 6 at https://www.bea.gov/sites/default/files/2020-09/gdp2q20_3rd.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 31.4 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 |
∆% |
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 |
17,302.5 |
9.8 |
-9.0 |
-9.0 |
Cumulative ∆%
IQ2012 to IIQ2020 |
8.1 |
|
|
|
Annual
Equivalent ∆% |
0.9 |
|
|
Source: US
Bureau of Economic Analysis https://apps.bea.gov/iTable/index_nipa.cfm
Chart GDP of the US Bureau of
Economic Analysis provides the rates of growth of GDP at SAAR (seasonally
adjusted annual rate) in the 16 quarters from IIIQ2016 to IIQ2020. Growth has
been fluctuating. The final data point is minus 31.4 in percent in IIQ2020 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.
Chart GDP,
Seasonally Adjusted Quarterly Rates of Growth of United States GDP, ∆%
Source: US
Bureau of Economic Analysis
https://www.bea.gov/data/gdp/gross-domestic-product
Historical
parallels are instructive but have all the limitations of empirical research in
economics. The more instructive comparisons are not with the Great Depression
of the 1930s but rather with the recessions in the 1950s, 1970s and 1980s. The
growth rates and job creation in the expansion of the economy away from
recession are subpar in the current expansion compared to others in the past.
Four recessions are initially considered, following the reference dates of the
National Bureau of Economic Research (NBER) (https://www.nber.org/cycles.html):
IIQ1953-IIQ1954, IIIQ1957-IIQ1958, IIIQ1973-IQ1975 and IQ1980-IIIQ1980. The
data for the earlier contractions illustrate that the growth rate and job
creation in the current expansion are inferior. The sharp contractions of the
1950s and 1970s are considered in Table I-1, showing the Bureau of Economic
Analysis (BEA) quarter-to-quarter, seasonally adjusted (SA), yearly-equivalent
growth rates of GDP. The recovery from the recession of 1953 consisted of four
consecutive quarters of high percentage growth rates from IIQ1954 to IIIQ1955:
4.6, 8.1, 11.9 and 6.7. The recession of 1957 was followed by four consecutive
high percentage growth rates from IIIQ1958 to IIQ1959: 9.6, 9.7, 7.9 and 9.3.
The recession of 1973-1975 was followed by high percentage growth rates from
IIQ1975 to IQ1976: 2.9, 7.0, 5.5 and 9.3. The disaster of the Great Inflation
and Unemployment of the 1970s, which made stagflation notorious, is even better
in growth rates during the expansion phase in comparison with the current cycle
slow-growth recession.
Table I-1, US,
Seasonally Adjusted Quarterly Percentage Growth Rates in Annual Equivalent of
GDP in Cyclical Recessions and Following Four Quarter Expansions ∆%
|
IQ |
IIQ |
IIIQ |
IV |
R
IIQ1953-IIQ1954 |
|
|
|
|
1953 |
|
|
-2.2 |
-5.9 |
1954 |
-1.9 |
|
|
|
E
IIIQ1954-IIQ1955 |
|
|
|
|
1954 |
|
|
4.6 |
8.1 |
1955 |
11.9 |
6.7 |
|
|
R
IIIQ1957-IIQ1958 |
|
|
|
|
1957 |
|
|
|
-4.1 |
1958 |
-10.0 |
|
|
|
E
IIIQ1958-IIQ1959 |
|
|
|
|
1958 |
|
|
9.6 |
9.7 |
1959 |
7.9 |
9.3 |
|
|
R
IVQ1969-IV1970 |
|
|
|
|
1969 |
|
|
|
-1.9 |
1970 |
-0.6 |
|
|
|
E
IIQ1970-IQ1971 |
|
|
|
|
1970 |
|
0.6 |
3.7 |
-4.2 |
1971 |
11.3 |
|
|
|
R
IVQ1973-IQ1975 |
|
|
|
|
1973 |
|
|
|
3.8 |
1974 |
-3.4 |
1.0 |
-3.7 |
-1.5 |
1975 |
-4.8 |
|
|
|
E
IIQ1975-IQ1976 |
|
|
|
|
1975 |
|
2.9 |
7.0 |
5.5 |
1976 |
9.3 |
|
|
|
R
IQ1980-IIIQ1980 |
|
|
|
|
1980 |
1.3 |
-8.0 |
-0.5 |
|
R
IQ1981-IVQ1982 |
|
|
|
|
1981 |
8.1 |
-2.9 |
4.9 |
-4.3 |
1982 |
-6.1 |
1.8 |
-1.5 |
0.2 |
E
IQ1983-IVQ1983 |
|
|
|
|
1983 |
5.4 |
9.4 |
8.2 |
8.6 |
R
IVQ2007-IIQ2009 |
|
|
|
|
2008 |
-2.3 |
2.1 |
-2.1 |
-8.4 |
2009 |
-4.4 |
-0.6 |
|
|
E
IIIQ2009-IIQ2010 |
|
|
|
|
2009 |
|
|
1.5 |
4.5 |
2010 |
1.5 |
3.7 |
|
|
Source: Bureau
of Economic Analysis https://apps.bea.gov/iTable/index_nipa.cfm
The NBER dates another recession in 1980 that
lasted about half a year. If the two recessions from IQ1980s to IIIQ1980 and
IIIQ1981 to IVQ1982 are combined, the impact of lost GDP of 4.8 percent is more
comparable to the latest revised 4.0 percent drop of the recession from IVQ2007
to IIQ2009. The recession in 1981-1982 is quite similar on its own to the
2007-2009 recession. In contrast, during the Great Depression in the four years
of 1930 to 1933, GDP in constant dollars fell 26.4 percent cumulatively and
fell 45.3 percent in current dollars (Pelaez and Pelaez, Financial
Regulation after the Global Recession (2009a), 150-2, Pelaez and Pelaez, Globalization
and the State, Vol. II (2009b), 205-7 and revisions in https://apps.bea.gov/iTable/index_nipa.cfm). Table I-2 provides the Bureau of Economic
Analysis (BEA) quarterly growth rates of GDP in SA yearly equivalents for the
recessions of 1981 to 1982 and 2007 to 2009, using the latest major revision
published on Jul 27, 2016, subsequent revisions, the revision since 1929 (https://www.bea.gov/newsreleases/national/gdp/2018/pdf/gdp2q18_adv.pdf), revising data since 1929 (“Comprehensive Update of the National Income and Product
Accounts The estimates released today also reflect the results of the 15th
comprehensive update of the National Income and Product Accounts (NIPAs). The
updated estimates reflect previously announced improvements and include the
introduction of new not seasonally adjusted estimates for GDP, GDI, and their
major components. For more information, see the Technical Note. Revised NIPA
table stubs, initial results, and background materials are available on the BEA
Web site.”) and the third estimate for
IIQ2019 (https://www.bea.gov/system/files/2019-09/gdp2q19_3rd.pdf) revising estimates from IQ2014 through
IQ2019, which are available in the dataset of the US Bureau of Economic
Analysis (https://apps.bea.gov/iTable/index_nipa.cfm). The first estimate for IIQ2020 (https://www.bea.gov/sites/default/files/2020-07/gdp2q20_adv.pdf) provides the annual update: (The
estimates released today also reflect the results of the Annual Update of the
National Income and Product Accounts (NIPAs). The timespan of the update is the
first quarter of 2015 through the fourth quarter of 2019 for estimates of real
GDP and its major components, and the first quarter of 1999 through the fourth
quarter of 2019 for estimates of income and saving. The reference year remains
2012. More information on the 2020 Annual Update is included in the May Survey
of Current Business article, “GDP and the Economy https://apps.bea.gov/scb/2020/05-may/0520-gdp-economy.htm#annual-update.” There is a third estimate of GDP for IIQ2020 (https://www.bea.gov/sites/default/files/2020-09/gdp2q20_3rd.pdf). There were four quarters of contraction in
1981-1982 ranging in rate from -1.5 percent to -6.1 percent and five quarters
of contraction in 2007-2009 ranging in rate from -0.6 percent to -8.4 percent.
The striking difference is that in the first forty one quarters of expansion
from IQ1983 to IVQ1993, shown in Table I-2 in relief, GDP grew at the high
quarterly percentage growth rates of 5.4, 9.4, 8.2, 8.6, 8.1, 7.1, 3.9, 3.3,
3.9, 3.6, 6.2, 3.0, 3.8, 1.8, 3.9, 2.2, 3.0, 4.4, 3.5, 7.0, 2.1, 5.4, 2.4, 5.4,
4.1, 3.1, 3.0, 0.8, 4.4, 1.5, 0.3, minus 3.6, minus 1.9, 3.2, 2.0, 1.4 , 4.9,
4.4, 4.0, 4.2, 0.7, 2.3, 1.9, and 5.6 in IVQ1993. 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). Table III-1 shows weaker performance in
IIQ1990 and IIIQ1990 and contractions at 3.6 percent in IVQ1990 and 1.9 percent
in IQ1991. In contrast, the percentage growth rates in the first forty one
quarters of expansion from IIIQ2009 to IIIQ2019 shown in relief in Table I-2
were mediocre: 1.5, 4.5, 1.5, 3.7, 3.0, 2.0, -1.0, 2.9, -0.1, 4.7, 3.2, 1.7,
0.5, 0.5, 3.6, 0.5, 3.2, 3.2, minus 1.1, 5.5, 5.0, 2.3, 3.8, 2.7, 1.5, 0.6,
2.3, 1.3, 2.2, 2.5, 2.3, 1.7, 2.9, 3.9, 3.8, 2.7, 2.1, 1.3, 2.9, 1.5, 2.6, 2.4,
minus 5.0 and minus 31.4 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.
Economic growth and employment creation continued at slow rhythm during 2012
and in 2013-2019 while much stronger growth would be required in movement to
full employment. The cycle is now long by historical standards and growth rates
are typically weaker in the final periods of cyclical expansions.
Table I-2, US,
Quarterly Growth Rates of GDP, % Annual Equivalent SA
Q |
1981 |
1982 |
1983 |
1984 |
2008 |
2009 |
2010 |
I |
8.1 |
-6.1 |
5.4 |
8.1 |
-2.3 |
-4.4 |
1.5 |
II |
-2.9 |
1.8 |
9.4 |
7.1 |
2.1 |
-0.6 |
3.7 |
III |
4.9 |
-1.5 |
8.2 |
3.9 |
-2.1 |
1.5 |
3.0 |
IV |
-4.3 |
0.2 |
8.6 |
3.3 |
-8.4 |
4.5 |
2.0 |
|
|
|
|
1985 |
|
|
2011 |
I |
|
|
|
3.9 |
|
|
-1.0 |
II |
|
|
|
3.6 |
|
|
2.9 |
III |
|
|
|
6.2 |
|
|
-0.1 |
IV |
|
|
|
3.0 |
|
|
4.7 |
|
|
|
|
1986 |
|
|
2012 |
I |
|
|
|
3.8 |
|
|
3.2 |
II |
|
|
|
1.8 |
|
|
1.7 |
III |
|
|
|
3.9 |
|
|
0.5 |
IV |
|
|
|
2.2 |
|
|
0.5 |
|
|
|
|
1987 |
|
|
2013 |
I |
|
|
|
3.0 |
|
|
3.6 |
II |
|
|
|
4.4 |
|
|
0.5 |
III |
|
|
|
3.5 |
|
|
3.2 |
IV |
|
|
|
7.0 |
|
|
3.2 |
|
|
|
|
1988 |
|
|
2014 |
I |
|
|
|
2.1 |
|
|
-1.1 |
II |
|
|
|
5.4 |
|
|
5.5 |
III |
|
|
|
2.4 |
|
|
5.0 |
IV |
|
|
|
5.4 |
|
|
2.3 |
|
|
|
|
1989 |
|
|
2015 |
I |
|
|
|
4.1 |
|
|
3.8 |
II |
|
|
|
3.1 |
|
|
2.7 |
III |
|
|
|
3.0 |
|
|
1.5 |
IV |
|
|
|
0.8 |
|
|
0.6 |
|
|
|
|
1990 |
|
|
2016 |
I |
|
|
|
4.4 |
|
|
2.3 |
II |
|
|
|
1.5 |
|
|
1.3 |
III |
|
|
|
0.3 |
|
|
2.2 |
IV |
|
|
|
-3.6 |
|
|
2.5 |
|
|
|
|
1991 |
|
|
2017 |
I |
|
|
|
-1.9 |
|
|
2.3 |
II |
|
|
|
3.2 |
|
|
1.7 |
III |
|
|
|
2.0 |
|
|
2.9 |
IV |
|
|
|
1.4 |
|
|
3.9 |
|
|
|
|
1992 |
|
|
2018 |
I |
|
|
|
4.9 |
|
|
3.8 |
II |
|
|
|
4.4 |
|
|
2.7 |
III |
|
|
|
4.0 |
|
|
2.1 |
IV |
|
|
|
4.2 |
|
|
1.3 |
|
|
|
|
1993 |
|
|
2019 |
I |
|
|
|
0.7 |
|
|
2.9 |
II |
|
|
|
2.3 |
|
|
1.5 |
III |
|
|
|
1.9 |
|
|
2.6 |
IV |
|
|
|
5.6 |
|
|
2.4 |
|
|
|
|
1994 |
|
|
|
I |
|
|
|
3.9 |
|
|
-5.0 |
II |
|
|
|
5.5 |
|
|
-31.4 |
III |
|
|
|
2.4 |
|
|
|
IV |
|
|
|
4.7 |
|
|
|
Source: US Bureau of Economic Analysis https://apps.bea.gov/iTable/index_nipa.cfm
Chart I-1
provides the real GDP of the US between 1929 and 1999. US GDP grew at the
yearly average rate of 3.5 percent between 1929 and 1999. There is an evident
acceleration of the rate of GDP growth in the 1990s as shown by a much sharper
slope of the growth curve. Cobet and Wilson (2002) define labor productivity as
the value of manufacturing output produced per unit of labor input used (see
Pelaez and Pelaez, The Global Recession
Risk (2007), 137-44). Between 1950 and 2000, labor productivity in the US
grew less rapidly than in Germany and Japan. The major part of the increase in
productivity in Germany and Japan occurred between 1950 and 1973 while the rate
of productivity growth in the US was relatively subdued in several periods.
While Germany and Japan reached their highest growth rates of productivity
before 1973, the US accelerated its rate of productivity growth in the second
half of the 1990s. Between 1950 and 2000, the rate of productivity growth in
the US of 2.9 percent per year was much lower than 6.3 percent in Japan and 4.7
percent in Germany. Between 1995 and 2000, the rate of productivity growth of
the US of 4.6 percent exceeded that of Japan of 3.9 percent and the rate of
Germany of 2.6 percent.
Chart I-1, US, Real GDP 1929-1999
Source: US Bureau of Economic Analysis https://apps.bea.gov/iTable/index_nipa.cfm
Chart I-1A provides real GDP annually from 1929 to 2019.
Growth after the global recession from IVQ2007 to IIQ2009 has not been sufficiently
high to compensate for the contraction as it had in past economic cycles. The
drop of output in the recession from IVQ2007 to IIQ2009 has been followed by
anemic recovery compared with return to trend at 3.0 percent from 1870 to 2010
after events such as wars and recessions (Lucas 2011May) and a standstill that
can lead to growth recession, or low rates of economic growth. The expansion is
relatively long compared to earlier expansion and there could be even another
contraction or conventional recession in the future. This could be a fact 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. The average rate of growth from 1947 to 2019 is 3.2
percent. The average growth rate from IV2007 to IIQ2020 is only 0.7 percent in
contrast with 2.9 percent annual equivalent from the end of the recession in
IVQ2001 to the end of the expansion in IVQ2007. 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
third estimate of GDP for IIQ2020 (https://www.bea.gov/sites/default/files/2020-09/gdp2q20_3rd.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/2020/08/d-ollar-devaluation-and-yuan.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/2020/08/d-ollar-devaluation-and-yuan.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 $5505.1 billion than
actual $17,302.5 billion. There are more than five trillion dollars of GDP less
than at trend, explaining the 34.8 million unemployed or underemployed
equivalent to actual unemployment/underemployment of 20.2 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/2020/09/exchange-rate-fluctuations-1.html and earlier https://cmpassocregulationblog.blogspot.com/2020/08/thirty-eight-million-unemployed-or.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 IIQ2020 is 24.1 percent lower than at trend. US GDP
grew from $15,762.0 billion in IVQ2007 in constant dollars to $17,302.5
billion in IIQ2020 or 9.8 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 Aug 1919
to Aug 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 155.5554 in Aug 2020. The actual index NSA in Aug 2020 is 99.2841
which is 36.2 percent below trend. The underperformance of manufacturing in
Mar-Aug 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 163.3909 in
Aug 2020. The actual index NSA in Aug 2020 is 99.2841, which is 39.2 percent
below trend. Manufacturing output grew at average 1.7 percent between Dec 1986
and Aug 2020. Using trend growth of 1.7 percent per year, the index would
increase to 134.0774 in Aug 2020. The output of manufacturing at 99.2841 in Aug
2020 is 26.0 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 100.4257 in Aug 2020 or 16.3 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 164.9372 in Aug
2020. The NAICS index at 100.4257 in Aug 2020 is 39.1 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 132.0705 in Aug 2020. The NAICS index at
100.4257 in Aug 2020 is 24.0 percent below trend under this alternative
calculation.
Chart I-1A, US, Real GDP 1929-2019
Source: US Bureau of Economic Analysis https://apps.bea.gov/iTable/index_nipa.cfm
Chart I-2
provides the growth of real quarterly GDP in the US between 1947 and 2020. The
drop of output in the recession from IVQ2007 to IIQ2009 has been followed by
anemic recovery compared with return to trend at 3.0 percent from 1870 to 2010
after events such as wars and recessions (Lucas 2011May) and a standstill that
can lead to growth recession, or low rates of economic growth. The expansion is
relatively long compared to earlier expansions and there could be another
contraction or conventional recession in the future. The average rate of growth
from 1947 to 2019 is 3.2 percent. The annual equivalent growth rate from
IVQ2007 to IVQ2019 is only 1.7 percent with 2.9 percent from the end of the
recession in IVQ2001 to the end of the expansion in IVQ2007. There is sharp
contraction in IQ2020 and IIQ2020 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.
Chart I-2, US, Real GDP, Quarterly, 1947-2020
Source: US Bureau of Economic Analysis
https://apps.bea.gov/iTable/index_nipa.cfm
Chart I-3
provides real GDP percentage change on the quarter a year earlier for
1983-1993. The objective is simply to
compare expansion in two recoveries from sharp contractions as shown in Table
I-5. Growth rates in the early phase of the recovery in 1983 and 1984 were very
high, which is the opportunity to reduce unemployment that has characterized
cyclical expansion in the postwar US economy. 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).
Chart I-3, Real GDP Percentage Change on Quarter a Year
Earlier 1983-1993
Source: US Bureau of Economic Analysis
https://apps.bea.gov/iTable/index_nipa.cfm
In contrast,
growth rates in the comparable forty-four quarters of expansion from 2009 to
2020 in Chart I-4 have been mediocre. As a result, growth has not provided the
exit from unemployment and underemployment as in other cyclical expansions in
the postwar period. Growth rates did not rise in V shape as in earlier
expansions and then declined close to the standstill of growth recessions.
There is sharp decrease in the rate of growth in IQ2020 relative to IQ2019 at
0.3 percent and contraction of 9.0 percent in IIQ2020 relative to IIQ2019.
Chart I-4, US, Real GDP Percentage Change on Quarter a Year
Earlier 2009-2020
Source: US Bureau of Economic Analysis
https://apps.bea.gov/iTable/index_nipa.cfm
Table I-3
provides percentage change of real GDP in the United States in the 1930s, 1980s
and 2000s. The recession in 1981-1982 is quite similar on its own to the
2007-2009 recession. In contrast, during the Great Depression in the four years
of 1930 to 1933, GDP in constant dollars fell 26.3 percent cumulatively and
fell 45.3 percent in current dollars (Pelaez and Pelaez, Financial
Regulation after the Global Recession (2009a), 150-2, Pelaez and Pelaez, Globalization
and the State, Vol. II (2009b), 205-7 and revisions in https://apps.bea.gov/iTable/index_nipa.cfm). Data are
available for the 1930s only on a yearly basis. US GDP fell 4.8 percent in the
two recessions (1) from IQ1980 to IIIQ1980 and (2) from III1981 to IVQ1982 and
4.0 percent cumulatively in the recession from IVQ2007 to IIQ2009. It is
instructive to compare the first years of the expansions in the 1980s and the
current expansion. GDP grew at 4.6 percent in 1983, 7.2 percent in 1984, 4.2
percent in 1985, 3.5 percent in 1986, 3.5 percent in 1987, 4.2 percent in 1988 and
3.7 percent in 1989. In contrast, GDP grew 2.6 percent in 2010, 1.6 percent in
2011, 2.2 percent in 2012, 1.8 percent in 2013, 2.5 percent in 2014 and 3.1
percent in 2015. GDP grew 1.7 percent in 2016 and 2.3 percent in 2017. GDP grew
3.0 percent in 2018 and 2.2 percent in 2019. Actual annual equivalent GDP
growth in the thirty-four quarters from IQ2012 to IIQ2020 is 1.2 percent and
minus 9.5 percent in the four quarters ending in IIQ2020. GDP grew at 4.2
percent in 1985, 3.5 percent in 1986, 3.5 percent in 1987, 4.2 percent in 1988
and 3.7 percent in 1989. The forecasts of the central tendency of participants
of the Federal Open Market Committee (FOMC) are in the range of minus 4.0 to
minus 3.0 percent in 2020 (https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20200916.pdf)
with
less reliable forecast of 3.6 to 4.7 percent in 2021 (https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20200916.pdf). Growth of
GDP in the expansion from IIIQ2009 to IIQ2020 has been at average 1.2 percent
in annual equivalent with sharp contraction at 31.4 percent SAAR in IIQ2020 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.
Table I-3, US,
Percentage Change of GDP in the 1930s, 1980s and 2000s, ∆%
Year |
GDP ∆% |
Year |
GDP ∆% |
Year |
GDP ∆% |
1930 |
-8.5 |
1980 |
-0.3 |
2000 |
4.1 |
1931 |
-6.4 |
1981 |
2.5 |
2001 |
1.0 |
1932 |
-12.9 |
1982 |
-1.8 |
2002 |
1.7 |
1933 |
-1.2 |
1983 |
4.6 |
2003 |
2.9 |
1934 |
10.8 |
1984 |
7.2 |
2004 |
3.8 |
1935 |
8.9 |
1985 |
4.2 |
2005 |
3.5 |
1936 |
12.9 |
1986 |
3.5 |
2006 |
2.9 |
1937 |
5.1 |
1987 |
3.5 |
2007 |
1.9 |
1938 |
-3.3 |
1988 |
4.2 |
2008 |
-0.1 |
1939 |
8.0 |
1989 |
3.7 |
2009 |
-2.5 |
1940 |
8.8 |
1990 |
1.9 |
2010 |
2.6 |
1941 |
17.7 |
1991 |
-0.1 |
2011 |
1.6 |
1942 |
18.9 |
1992 |
3.5 |
2012 |
2.2 |
1943 |
17.0 |
1993 |
2.8 |
2013 |
1.8 |
1944 |
8.0 |
1994 |
4.0 |
2014 |
2.5 |
1945 |
-1.0 |
1995 |
2.7 |
2015 |
3.1 |
1946 |
-11.6 |
1996 |
3.8 |
2016 |
1.7 |
1947 |
-1.1 |
1997 |
4.4 |
2017 |
2.3 |
1948 |
4.1 |
1998 |
4.5 |
2018 |
3.0 |
1949 |
-0.6 |
1999 |
4.8 |
2019 |
2.2 |
Source: US
Bureau of Economic Analysis https://apps.bea.gov/iTable/index_nipa.cfm
Chart I-5
provides percentage change of GDP in the US during the 1930s. There is vast
literature analyzing the Great Depression (Pelaez and Pelaez, Regulation of Banks and Finance (2009),
198-217). Cole and Ohanian (1999) find that US real per capita output was lower
by 11 percent in 1939 than in 1929 while the typical expansion of real per
capita output in the US during a decade is 31 percent. Private hours worked in
the US were 25 percent lower in 1939 relative to 1929.
Chart I-5, US, Percentage Change of GDP in the 1930s
Source: US Bureau of Economic Analysis
https://apps.bea.gov/iTable/index_nipa.cfm
In contrast,
Chart I-6 shows rapid recovery from the recessions in the 1980s. High growth
rates in the initial quarters of expansion eliminated the unemployment and
underemployment created during the contraction. The economy then returned to
grow at the trend of expansion, interrupted by another contraction in 1991. 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).
Chart I-6, US, Percentage Change of GDP in the 1980s
Source: US Bureau of Economic Analysis
https://apps.bea.gov/iTable/index_nipa.cfm
Chart I-7
provides the rates of growth during the 2000s. Growth rates in the initial
thirty-three quarters of expansion have been relatively lower than during
recessions after World War II. As a result, unemployment and underemployment
continue at the rate of 20.2 percent of the effective US labor force (https://cmpassocregulationblog.blogspot.com/2020/09/exchange-rate-fluctuations-1.html and earlier https://cmpassocregulationblog.blogspot.com/2020/08/thirty-eight-million-unemployed-or.html). There is
sharp contraction at SAAR of 31.4 percent in IIQ2020 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.
Chart I-7, US, Percentage Change of GDP in the 2000s
Source: US Bureau of Economic Analysis
https://apps.bea.gov/iTable/index_nipa.cfm
Characteristics of the four
cyclical contractions are in Table I-4 with the first column showing the number
of quarters of contraction; the second column the cumulative percentage
contraction; and the final column the average quarterly rate of contraction.
There were two contractions from IQ1980 to IIIQ1980 and from IIIQ1981 to
IVQ1982 separated by three quarters of expansion. The drop of output combining
the declines in these two contractions is 4.8 percent, which is almost equal to
the decline of 4.0 percent in the contraction from IVQ2007 to IIQ2009. In
contrast, during the Great Depression in the four years of 1930 to 1933, GDP in
constant dollars fell 26.3 percent cumulatively and fell 45.3 percent in
current dollars (Pelaez and Pelaez, Financial Regulation after the Global
Recession (2009a), 150-2, Pelaez and Pelaez, Globalization and the
State, Vol. II (2009b), 205-7 and revisions in https://apps.bea.gov/iTable/index_nipa.cfm). The comparison of the global
recession after 2007 with the Great Depression is entirely misleading.
Table I-4, US,
Number of Quarters, GDP Cumulative Percentage Contraction and Average
Percentage Annual Equivalent Rate in Cyclical Contractions
|
Number of
Quarters |
Cumulative
Percentage Contraction |
Average
Percentage Rate |
IIQ1953 to
IIQ1954 |
3 |
-2.4 |
-0.8 |
IIIQ1957 to
IIQ1958 |
3 |
-3.0 |
-1.0 |
IVQ1973 to
IQ1975 |
5 |
-3.1 |
-0.6 |
IQ1980 to
IIIQ1980 |
2 |
-2.2 |
-1.1 |
IIIQ1981 to
IVQ1982 |
4 |
-2.6 |
-0.65 |
IVQ2007 to
IIQ2009 |
6 |
-4.0 |
-0.7 |
Sources:
Source: Bureau of Economic Analysis https://apps.bea.gov/iTable/index_nipa.cfm
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 31.4
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 8.1 percent.
This growth is equivalent to 0.9 percent per year, obtained by dividing GDP in
IIQ2020 of $17,302.5 billion by GDP in IVQ2011 of $16,004.1 billion and
compounding by 4/34: {[($17,302.5/$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 |
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 |
14.3 |
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
Source: Bureau
of Economic Analysis https://apps.bea.gov/iTable/index_nipa.cfm
Chart I-8 shows
US real quarterly GDP growth from 1980 to 1993. The economy contracted during
the recession and then expanded vigorously throughout the 1980s, rapidly
eliminating the unemployment caused by the contraction. 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).
Chart I-8, US, Real GDP, 1980-1993
Source: US Bureau of Economic Analysis
https://apps.bea.gov/iTable/index_nipa.cfm
Chart I-9
shows the entirely different situation of real quarterly GDP in the US between
2007 and 2020. The economy has underperformed during the first forty-four
quarters of expansion for the first time in the comparable contractions since
the 1950s. The US economy was in a perilous cyclical slow growth now 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, shown by contraction sharp
contractions in the final data points in IQ2020 and IIQ2020.
Chart I-9, US, Real GDP, 2007-2020
Source: US Bureau of Economic Analysis
https://apps.bea.gov/iTable/index_nipa.cfm
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 14.3
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 9.8 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 $5505.1 billion than
actual $17,302.5 billion. There are more than five trillion dollars of GDP less
than at trend, explaining the 34.8 million unemployed or underemployed
equivalent to actual unemployment/underemployment of 20.2 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/2020/09/exchange-rate-fluctuations-1.html and earlier https://cmpassocregulationblog.blogspot.com/2020/08/thirty-eight-million-unemployed-or.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 IIQ2020 is 24.1 percent lower than at trend. US GDP
grew from $15,762.0 billion in IVQ2007 in constant dollars to $17,302.5
billion in IIQ2020 or 9.8 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 Aug 1919
to Aug 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 155.5554 in Aug 2020. The actual index NSA in Aug 2020 is 99.2841
which is 36.2 percent below trend. The underperformance of manufacturing in
Mar-Aug 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 163.3909 in
Aug 2020. The actual index NSA in Aug 2020 is 99.2841, which is 39.2 percent
below trend. Manufacturing output grew at average 1.7 percent between Dec 1986
and Aug 2020. Using trend growth of 1.7 percent per year, the index would
increase to 134.0774 in Aug 2020. The output of manufacturing at 99.2841 in Aug
2020 is 26.0 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 100.4257 in Aug 2020 or 16.3 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 164.9372 in Aug
2020. The NAICS index at 100.4257 in Aug 2020 is 39.1 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 132.0705 in Aug 2020. The NAICS index at
100.4257 in Aug 2020 is 24.0 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 9.0 percent in IIQ2020 and decreased 9.0
percent relative to a year earlier (See Table 6 at https://www.bea.gov/sites/default/files/2020-09/gdp2q20_3rd.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 |
∆% |
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 |
17,302.5 |
9.8 |
-9.0 |
-9.0 |
Source: US
Bureau of Economic Analysis https://apps.bea.gov/iTable/index_nipa.cfm
Chart I-10
provides the percentage change of real GDP from the same quarter a year earlier
from 1980 to 1993. There were two contractions almost in succession in 1980 and
from 1981 to 1983. The expansion was marked by initial high rates of growth as
in other recession in the postwar US period during which employment lost in the
contraction was recovered. Growth rates continued to be high after the initial
phase of expansion. 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).
Chart I-10, Percentage Change of Real Gross Domestic Product
from Quarter a Year Earlier 1980-1993
Source: US Bureau of Economic Analysis
https://apps.bea.gov/iTable/index_nipa.cfm
The
experience of recovery after 2009 is not as complete as during the 1980s. Chart
I-11 shows the much lower rates of growth in the early phase of the current
expansion and sharp decline from an early peak. The US missed the initial high
growth rates in cyclical expansions that eliminate unemployment and
underemployment. There is sharp decrease of the rate of growth of GDP to 0.3
percent in IQ2020 and minus 9.0 percent in IIQ2020 relative to a year earlier (See Table 6 at https://www.bea.gov/sites/default/files/2020-09/gdp2q20_3rd.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.
Chart I-11, Percentage Change of Real Gross Domestic Product
from Quarter a Year Earlier 2007-2020
Source: US Bureau of Economic Analysis
https://apps.bea.gov/iTable/index_nipa.cfm
Chart I-12
provides growth rates from a quarter relative to the prior quarter during the
1980s. There is the same strong initial growth followed by a long period of
sustained growth. 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).
Chart I-12, Percentage Change of Real Gross Domestic Product
from Prior Quarter 1980-1993
Source: US Bureau of Economic Analysis
https://apps.bea.gov/iTable/index_nipa.cfm
Chart I-13
provides growth rates in a quarter relative to the prior quarter from 2007 to
2020. Growth in the current expansion after IIIQ2009 has not been as strong as
in other postwar cyclical expansions. There is sharp contraction at SAAR of
minus 5.0 percent in IQ2020 and minus 31.4 percent IIQ2020 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.
Chart I-13, Percentage Change of Real Gross Domestic Product
from Prior Quarter 2007-2020
Source: US Bureau of Economic Analysis
https://apps.bea.gov/iTable/index_nipa.cfm
The revised
estimates and earlier estimates from IQ2008 to IQ2016 in seasonally adjusted
annual equivalent rates are shown in Table I-7. The strongest revision is for
IVQ2008 for which the contraction of GDP is revised from minus 6.8 percent to
minus 8.9 percent and minus 8.2 percent. IQ2009 is also revised from contraction
of minus 4.9 percent to minus 6.7 percent but then lowered to contraction of
5.3 percent and 5.4 percent. There is only minor revision in IIIQ2008 of the
contraction of minus 4.0 percent to minus 3.7 percent and much lower to minus
1.9 percent. Growth of 5.0 percent in IV2009 is revised to 3.8 percent and then
increased to 4.0 percent but lowered to 3.9 percent. Growth in IQ2010 is lowered from 3.9 percent
to 2.3 percent and 1.7 percent. Growth in IIQ2010 is upwardly revised to 3.8
percent but then lowered to 2.2 percent. The final revision increased growth in
IIQ2010 to 3.9 percent. Revisions lowered growth of 1.9 percent in IQ2011 to
minus 1.5 percent. The revisions increased growth of 1.8 percent in IQ2013 to
2.7 percent and increased growth of 2.0 percent in IQ2012 to 2.3 percent. The
revision reduced the decline of GDP from 2.9 percent in IQ2014 to 2.1 percent.
The revision of Jul 20, 2015 reduced significantly the rate of growth in 2013.
The revision of Jul 27, 2016 increased the growth rate in 2013 and 2014. The
revisions do not alter the conclusion that the current expansion is much weaker
than historical sharp contractions since the 1950s and is now changing into
slow growth recession with higher risks of contraction and continuing
underperformance.
Table I-7, US,
Quarterly Growth Rates of GDP, % Annual Equivalent SA, Revised and Earlier
Estimates
Quarters |
Rev Jul 29,
2016 |
Rev Jul 30,
2015 |
Rev Jul 30,
2014 |
Rev Jul 31, 2013 |
Rev Jul 27, 2012 |
Rev Jul 29, 2011 |
Earlier
Estimate |
2008 |
|||||||
I |
-2.7 |
-2.7 |
-1.8 |
-0.7 |
|||
II |
2.0 |
2.0 |
1.3 |
0.6 |
|||
III |
-1.9 |
-2.0 |
-3.7 |
-4.0 |
|||
IV |
-8.2 |
-8.3 |
-8.9 |
-6.8 |
|||
2009 |
|||||||
I |
-5.4 |
-5.4 |
-5.3 |
-6.7 |
-4.9 |
||
II |
-0.5 |
-0.4 |
-0.3 |
-0.7 |
-0.7 |
||
III |
1.3 |
1.3 |
1.4 |
1.7 |
1.6 |
||
IV |
3.9 |
3.9 |
4.0 |
3.8 |
5.0 |
||
2010 |
|||||||
I |
1.7 |
1.6 |
2.3 |
3.9 |
3.7 |
||
II |
3.9 |
3.9 |
2.2 |
3.8 |
1.7 |
||
III |
2.7 |
2.8 |
2.6 |
2.5 |
2.6 |
||
IV |
2.5 |
2.8 |
2.4 |
2.3 |
3.1 |
||
2011 |
|||||||
I |
-1.5 |
-1.3 |
0.1 |
0.4 |
1.9 |
||
II |
2.9 |
3.2 |
2.5 |
||||
III |
0.8 |
1.4 |
1.3 |
||||
IV |
4.6 |
4.9 |
4.1 |
||||
2012 |
|||||||
I |
2.7 |
2.3 |
3.7 |
2.0 |
|||
II |
1.9 |
1.6 |
1.2 |
1.3 |
|||
III |
0.5 |
2.5 |
2.8 |
3.1 |
|||
IV |
0.1 |
0.1 |
0.1 |
0.4 |
|||
2013 |
|||||||
I |
2.8 |
1.9 |
2.7 |
1.1 |
1.8 |
||
II |
0.8 |
1.1 |
1.8 |
2.5 |
|||
III |
3.1 |
3.0 |
4.5 |
4.1 |
|||
IV |
4.0 |
3.8 |
3.5 |
2.6 |
|||
2014 |
|||||||
I |
-1.2 |
-0.9 |
-2.1 |
-2.9 |
|||
II |
4.0 |
4.6 |
|||||
III |
5.0 |
4.3 |
|||||
IV |
2.3 |
2.1 |
|||||
2015 |
|||||||
I |
2.0 |
0.6 |
|||||
II |
2.6 |
|
|
|
|
|
|
III |
2.0 |
|
|
|
|
|
|
IV |
0.9 |
|
|
|
|
|
|
2016 |
|
|
|
|
|
|
|
I |
0.8 |
|
|
|
|
|
|
Note: Rev:
Revision
Source: US
Bureau of Economic Analysis
https://apps.bea.gov/iTable/index_nipa.cfm
Aggregate demand,
personal consumption expenditures (PCE) and gross private domestic investment
(GDI) were much stronger during the expansion phase from IQ1983 to IIIQ1993
than from IIIQ2009 to IIQ2020, as shown in Table I-8. GDI provided the impulse
of growth in 1983 and 1984, which has not been the case from 2009 to 2020. The
investment decision in the US economy has been frustrated in the current
cyclical expansion. Growth of GDP in IIIQ2013 at seasonally adjusted annual
rate of 3.2 percent consisted of positive contribution of 1.10 percentage
points of personal consumption expenditures (PCE) plus positive contribution of
2.60 percentage points of gross private domestic investment (GDI) of which 1.48
percentage points of inventory investment (∆PI), deduction of net exports
(trade or exports less imports) of 0.14 percentage points and deduction of 0.40
percentage points of government consumption expenditures and gross investment
(GOV) partly because of one-time deduction of national defense expenditures of
0.38 percentage points. Growth at 3.2 percent in IVQ2013 had strongest
contributions of 2.31 percentage points of PCE and 1.23 percentage points of
trade. Growth of GDP at minus 1.1 percent in IQ2014 is mostly contribution of
1.03 percentage points by PCE with deduction of 0.74 percentage points by GDI,
inventory divestment of 1.40 percentage points and trade deducting 1.11
percentage points. Growth at 5.5 percent in IIQ2014 consists of contributions
of 2.97 percentage points by PCE and 2.92 percentage points by GDI with 1.05
percentage points by inventory change. Trade deducted 0.46 percentage points
and government added 0.10 percentage points. Growth at 5.0 percent in IIIQ2014
consists of contribution of 2.92 percentage points by PCE, 1.47 percentage
points by GDI, 0.10 percentage points by trade and 0.49 percentage points by
government of which 0.22 percentage points by national defense expenditures.
Growth at 2.3 percent in IVQ2014 consists of contribution of 3.26 percentage
points by PCE, contribution of 0.09 percentage points by GDI and deduction of
0.69 percentage points by inventory investment. Net trade deducted 1.05
percentage points while government deducted 0.04 percentage mostly because of
deduction of 0.47 percentage points by national defense expenditure declining
at 10.6 percent in IVQ2014. Growth of GDP at 3.8 percent in IQ2015 consisted
mostly of contributions of 2.41 percentage points by personal consumption
expenditures, 2.46 percentage points by gross domestic investment and 2.28
percentage points by inventory accumulation while trade deducted 1.38
percentage points and government contributed 0.37 percentage points. Growth at
2.7 percent in IIQ2015 consisted mostly of contributions of 2.15 percentage
points by personal consumption expenditures, 0.23 percentage points by gross
domestic investment, deduction of 0.25 percentage points by net trade and
contribution of 0.60 percentage points by government consumption and
expenditures. Growth at 1.5 percent in IIIQ2015 consisted mostly of
contribution of personal consumption expenditures (PCE) of 2.24 percentage
points with government adding 0.32 percentage points. Gross domestic investment
(GDI) deducted 0.13 percentage points with deduction of inventory divestment of
0.69 percentage points while net trade deducted 0.97 percentage points. Growth
at 0.6 percent in IVQ2015 consisted mostly of contribution of 1.44 percentage
points by personal consumption expenditures (PCE). GDI deducted 0.83 percentage
points while trade deducted 0.22 percentage points and inventory divestment
deducted 0.64 percentage points. Growth
at 2.3 percent in IQ2016 consisted mostly of contribution of 2.08 percentage
points by personal consumption expenditures (PCE). There were deductions of
0.39 percentage points by gross domestic investment (GDI) and 0.73 percentage
points by inventory change. Net trade subtracted 0.05 percentage points and
government added 0.66 percentage points. Growth at 1.3 percent in IIQ2016
consisted mostly of contribution of 1.73 percentage points by PCE with GDI
deducting 0.58 percentage points. Inventory divestment deducted 0.83 percentage
points. Growth at 2.2 percent in IIIQ2016 consisted mostly of contribution of
1.75 percentage points by PCE with GDI contributing 0.03 percentage points.
Inventory investment deducted 0.50 percentage points and trade added 0.08
percentage points. Growth at 2.5 percent in IVQ2016 had positive contributions
of 1.68 percentage points of PCE, 1.80 of GDI and 0.19 of GOV. Inventory
investment added 1.35 percentage points and net trade deducted 1.13 percentage
points. Growth at 2.3 percent in IQ2017 originated in contribution of 2.15
percentage points by PCE and deduction of 0.23 percentage points by GDI with
contribution of 0.36 percentage points by net trade. GOV added 0.01 percentage
points and inventory divestment subtracted 1.41 percentage points. Growth of
GDP at 1.7 percent in IIQ217 originated in contributions of 1.23 percentage
points by PCE, 0.61 percentage points by GDI, deduction of 0.39 percentage
points by net trade and contribution of 0.34 percentage points by inventory
investment. Government added 0.27 percentage points. Growth at 2.9 percent in
IIIQ2017 consisted of positive contributions of 1.57 percentage points by PCE,
1.26 percentage points by GDI, 1.05 percentage points by inventory investment
and 0.08 percentage points by net trade. GOV contributed 0.04 percentage
points. Growth at 3.9 percent in IVQ2017 originated in positive contributions
of 2.82 percentage points by PCE, 1.07 percentage points by GDI and 0.49
percentage points by GOV. Inventory divestment deducted 0.50 percentage points
and net trade deducted 0.49 percentage points. Growth at 3.8 percent in IQ2018
originated in positive contributions of 1.40 percentage points by PCE, 1.83
percentage points by GDI and 0.26 percentage points by GOV. Inventory
investment added 0.41 percentage points and net trade added 0.29 percentage
points. Growth at 2.7 percent in IIQ2018 originated in positive contributions
of 2.13 percentage points by PCE and 0.50 percentage points by GOV. Inventory
divestment subtracted 0.94 percentage points and GDI deducted 0.19 percentage
points. Net trade contributed 0.25 percentage points. Growth at 2.1 percent in IIIQ2018 consisted
of positive contributions of 1.79 percentage points of PCE, 1.58 percentage
points of inventory change and 0.44 percentage points of GOV. GDI contributed
1.72 percentage points and net trade deducted 1.83 percentage points. Growth at
1.3 percent in IVQ2018 consisted of positive contributions of 1.05 percentage
points of PCE, 0.23 percentage points of inventory change and deduction of 0.16
percentage points of GOV. GDI contributed 0.69 percentage points and net trade
deducted 0.27 percentage points. Growth at 2.9 percent in IQ2019 consisted of
positive contributions of 1.25 percentage points of PCE, 0.21 percentage points
of inventory change and contribution of 0.43 percentage points of GOV. GDI
contributed 0.71 percentage points and net trade contributed 0.55 percentage
points. Growth at 1.5 percent in IIQ2019 consisted of contribution of 2.47
percentage points by PCE and 0.86 percentage points by government. GDI deducted
1.04 percentage points, inventory divestment deducted 0.97 percentage points
and net trade deducted 0.79 percentage points. Growth at 2.6 percent in
IIIQ2019 consisted of contribution of 1.83 percentage points by PCE and 0.37
percentage points by government. GDI contributed 0.34 percentage points,
inventory divestment deducted 0.09 percentage points and net trade contributed
0.04 percentage points. Growth at 2.4 percent in IVQ2019 consisted of
contribution of 1.07 percentage points by PCE and 0.42 percentage points by
government. GDI deducted 0.64 percentage points and inventory divestment
deducted 0.82 percentage points. Net trade contributed 1.52 percentage points.
Contraction at minus 5.0 percent in IQ2020, 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, consisted of
deduction of 4.75 percentage points by PCE. GDI deducted 1.56 percentage points
and inventory divestment deducted 1.34 percentage points. Net trade contributed
1.13 percentage points and government 0.22 percentage points. Contraction at
minus 31.4 percent in IIQ2020, 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, consisted of
deduction of 24.01 percentage points by PCE. GDI deducted 8.77 percentage
points and inventory divestment deducted 3.50 percentage points. Net trade
contributed 0.62 percentage points and government 0.77 percentage points. The
economy of the United States has lost the dynamic growth impulse of earlier
cyclical expansions with mediocre growth resulting from consumption forced by
one-time effects of financial repression, national defense expenditures and
inventory accumulation.
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 |
-31.4 |
-24.01 |
-8.77 |
-3.50 |
0.62 |
0.77 |
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
Source: Bureau
of Economic Analysis https://apps.bea.gov/iTable/index_nipa.cfm
The Bureau of Economic Analysis (BEA)
(pages 1-2) explains growth of GDP in IIQ2020 as follows (https://www.bea.gov/sites/default/files/2020-09/gdp2q20_3rd.pdf):
“Real gross domestic product (GDP) decreased at
an annual rate of 31.4 percent in the second quarter of 2020 (table 1),
according to the "third" estimate released by the Bureau of Economic
Analysis. In the first quarter, real GDP decreased 5.0 percent.
The “third” estimate of GDP released today is based
on more complete source data than were available for the "second"
estimate issued last month. In the second estimate, the decrease in real GDP
was 31.7 percent. The upward revision with the third estimate primarily
reflected an upward revision to personal consumption expenditures (PCE) that
was partly offset by downward revisions to exports and to nonresidential fixed
investment (see "Updates to GDP" on page 3).
The decrease in real GDP reflected decreases
in PCE, exports, nonresidential fixed investment, private inventory 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 nonresidential fixed investment primarily reflected a decrease in equipment
(led by transportation equipment). The decrease in private inventory investment
primarily reflected a decrease in retail (led by motor vehicle dealers). The
decrease in residential investment primarily reflected decreases in new
single-family housing.”
There are positive contributions to growth in IIQ2020 shown
in Table I-9:
·
Growth of national defense expenditures at 3.8 percent
·
Growth of government expenditures (GOV) at 2.5 percent
·
Growth of federal government expenditures (Federal GOV) at 16.4
percent
·
Contraction of imports, which are a deduction from growth, at
54.1 percent
There were negative contributions in IIQ2020:
·
Personal consumptions expenditures (PCE) contracting at 33.2
percent
·
Durable goods contracting at 1.7 percent
·
Nonresidential fixed investment contracting at 27.2 percent
·
Residential fixed investment contracting at 35.6 percent
·
Exports contracting at 64.4 percent
·
Inventory divestment subtracting 3.50 percentage points
The BEA finding accelerating factors:
- Contraction of imports, which are a deduction from
growth, at 54.1 percent after contracting at 15.0 percent in IQ2020
- Durable goods contracting at 1.7 percent after
contracting at 12.5 percent in IQ2020
- Government expanding at 2.5 percent after growing at
1.3 percent in IQ2020
- Federal government increasing at 16.4 percent after
increasing at 1.6 percent in IQ2020
The BEA finds offsetting decelerating factors:
·
Personal consumption expenditure PCE contracting at 33.2
percent after contracting at 6.9 percent in IQ2020
·
Nonresidential fixed investment (NRFI) contracting at 27.2
percent after contracting a 6.7 percent in IQ2020
·
Exports contracting at 64.4 percent after contracting at 9.5
percent in IQ2020
·
State and local government expenditures contracting at 5.4
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 11.8
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 9.6
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 |
-31.4 |
PCE |
3.7 |
2.7 |
1.6 |
-6.9 |
-33.2 |
Durable Goods |
12.7 |
6.3 |
3.1 |
-12.5 |
-1.7 |
NRFI |
0.0 |
1.9 |
-0.3 |
-6.7 |
-27.2 |
RFI |
-2.1 |
4.6 |
5.8 |
19.0 |
-35.6 |
Net Exports
GS % Points |
-0.79 |
0.04 |
1.52 |
1.13 |
0.62 |
Exports |
-4.5 |
0.8 |
3.4 |
-9.5 |
-64.4 |
Imports |
1.7 |
0.5 |
-7.5 |
-15.0 |
-54.1 |
GOV |
5.0 |
2.1 |
2.4 |
1.3 |
2.5 |
Federal GOV |
9.2 |
4.8 |
4.0 |
1.6 |
16.4 |
National
Defense |
4.4 |
5.6 |
6.6 |
-0.3 |
3.8 |
GDP Growth %
Points |
0.17 |
0.22 |
0.26 |
-0.01 |
0.18 |
State/Local
GOV |
2.6 |
0.6 |
1.5 |
1.1 |
-5.4 |
∆ PI % Points |
-0.97 |
-0.09 |
-0.82 |
-1.34 |
-3.50 |
Final Sales
of Domestic Product |
2.5 |
2.7 |
3.2 |
-3.6 |
-28.1 |
Gross
Domestic Purchases |
2.2 |
2.5 |
0.8 |
-5.9 |
-30.3 |
Prices Gross |
2.2 |
1.3 |
1.3 |
1.4 |
-1.4 |
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 |
-1.2 |
Prices of PCE |
2.5 |
1.4 |
1.5 |
1.3 |
-1.6 |
Prices of PCE
Excluding Food and Energy |
2.1 |
1.9 |
1.3 |
1.6 |
-0.8 |
Prices of
Market Based PCE |
2.1 |
1.1 |
1.5 |
1.3 |
-1.0 |
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 |
11.8 |
Personal
Saving As % Disposable Income |
7.3 |
7.2 |
7.3 |
9.6 |
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
https://apps.bea.gov/iTable/index_nipa.cfm
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 |
22.3 |
Durable |
7.6 |
Nondurable |
14.8 |
Services |
44.8 |
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 |
-1.5 |
Net Exports
of Goods and Services |
-2.8 |
Exports |
9.2 |
Goods |
5.8 |
Services |
3.3 |
Imports |
12.0 |
Goods |
9.9 |
Services |
2.1 |
Government |
19.7 |
Federal |
7.7 |
National Defense |
4.5 |
Nondefense |
3.2 |
State and Local |
12.0 |
PCE: personal
consumption expenditures; NRFI: nonresidential fixed investment; RFI:
residential fixed investment
Source: US
Bureau of Economic Analysis https://apps.bea.gov/iTable/index_nipa.cfm
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 |
Source: US
Bureau of Economic Analysis https://apps.bea.gov/iTable/index_nipa.cfm
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 0.4 percent in Aug 2020 and
increased 3.5 percent in Jul 2020 after increasing 6.1 percent in Jun 2020,
with all data seasonally adjusted, as shown in Table I-1.
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):
“Industrial production rose
0.4 percent in August for its fourth consecutive monthly increase.
However, even after the recent gains, the index in August was 7.3 percent
below its pre-pandemic February level. Manufacturing output continued to
improve in August, rising 1.0 percent, but the gains for most manufacturing
industries have gradually slowed since June. Mining production fell
2.5 percent in August, as Tropical Storm Marco and Hurricane Laura caused
sharp but temporary drops in oil and gas extraction and well drilling. The
output of utilities moved down 0.4 percent. At 101.4 percent of its
2012 average, the level of total industrial production was
7.7 percent lower in August than it was a year earlier. Capacity
utilization for the industrial sector increased 0.3 percentage point in
August to 71.4 percent, a rate that is 8.4 percentage points below
its long-run (1972–2019) average but 7.3 percentage points above its low
in April.” 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 13.7 percent from the trough in Apr
2009 to Aug 2020. Manufacturing in Aug 2020 is lower by 11.6 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
third estimate of GDP for IIQ2020 (https://www.bea.gov/sites/default/files/2020-09/gdp2q20_3rd.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/2020/08/d-ollar-devaluation-and-yuan.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/2020/08/d-ollar-devaluation-and-yuan.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 $5505.1 billion than
actual $17,302.5 billion. There are more than five trillion dollars of GDP less
than at trend, explaining the 34.8 million unemployed or underemployed
equivalent to actual unemployment/underemployment of 20.2 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/2020/09/exchange-rate-fluctuations-1.html and earlier https://cmpassocregulationblog.blogspot.com/2020/08/thirty-eight-million-unemployed-or.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 IIQ2020 is 24.1 percent lower than at trend. US GDP
grew from $15,762.0 billion in IVQ2007
in constant dollars to $17,302.5 billion in IIQ2020 or 9.8 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
Aug 1919 to Aug 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 155.5554 in Aug 2020. The actual index NSA in Aug 2020 is
99.2841 which is 36.2 percent below trend. The underperformance of
manufacturing in Mar-Aug 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 163.3909 in
Aug 2020. The actual index NSA in Aug 2020 is 99.2841, which is 39.2 percent
below trend. Manufacturing output grew at average 1.7 percent between Dec 1986
and Aug 2020. Using trend growth of 1.7 percent per year, the index would
increase to 134.0774 in Aug 2020. The output of manufacturing at 99.2841 in Aug
2020 is 26.0 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 100.4257 in Aug 2020 or 16.3 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 164.9372 in Aug 2020.
The NAICS index at 100.4257 in Aug 2020 is 39.1 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 132.0705 in Aug 2020. The NAICS index at
100.4257 in Aug 2020 is 24.0 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 86.4 percent in IIQ2020. Most of US national income is in the form of
services. In Aug 2020, there were 140.598 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 119.713 million NSA
in Aug 2020 accounted for 85.1 percent of total nonfarm jobs of 140.598 million,
of which 12.211 million, or 10.2 percent of total private jobs and 8.7 percent
of total nonfarm jobs, were in manufacturing. Private service-providing jobs
were 99.418 million NSA in Aug 2020, or 70.7 percent of total nonfarm jobs and
83.0 percent of total private-sector jobs. Manufacturing has share of 8.7 percent in US national income in
IIQ2020 and durable goods 5.1 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 IQ2020 |
% Total |
SAAR IIQ2020 |
% Total |
|
National Income WCCA |
18,092.3 |
100.0 |
15,768.7 |
100.0 |
Domestic Industries |
17,849.1 |
98.7 |
15,616.8 |
99.0 |
Private Industries |
15,767.2 |
87.1 |
13,626.3 |
86.4 |
Agriculture |
147.5 |
0.8 |
94.2 |
0.6 |
Mining |
155.5 |
0.9 |
62.9 |
0.4 |
Utilities |
204.1 |
1.1 |
209.2 |
1.3 |
Construction |
954.2 |
5.3 |
827.5 |
5.2 |
Manufacturing |
1671.5 |
9.2 |
1374.2 |
8.7 |
Durable Goods |
995.5 |
5.5 |
798.1 |
5.1 |
Nondurable Goods |
676.0 |
3.7 |
576.1 |
3.7 |
Wholesale Trade |
1010.9 |
5.6 |
876.7 |
5.6 |
Retail Trade |
1204.8 |
6.7 |
1074.4 |
6.8 |
Transportation & WH |
589.2 |
3.3 |
415.7 |
2.6 |
Information |
692.0 |
3.8 |
634.6 |
4.0 |
Finance, Insurance, RE |
3192.4 |
17.6 |
3218.9 |
20.4 |
Professional & Business Services |
2737.7 |
15.1 |
2471.3 |
15.7 |
Education, Health Care |
1873.3 |
10.4 |
1525.7 |
9.7 |
Arts, Entertainment |
795.8 |
4.4 |
404.3 |
2.6 |
Other Services |
538.4 |
3.0 |
436.7 |
2.8 |
Government |
2081.9 |
11.5 |
1990.5 |
12.6 |
Rest of the World |
243.2 |
1.3 |
151.9 |
1.0 |
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
https://apps.bea.gov/iTable/index_nipa.cfm
© Carlos M. Pelaez, 2009,
2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020.
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