that much Bureau of Economic Analysis Today, seasonally adjusted real U.S. GDP was reported to have grown at an annual rate of 2.8% in the first quarter. That’s close to the long-term historical average of 3.1% and continues the impressive track record of an economy that continues to grow despite persistent predictions of an impending recession.
Quarterly real GDP growth rate at an annualized rate, 1947:Q2-2024:Q2, historical average (3.1%) is in blue. Calculated as 400 times the natural log difference in real GDP from the previous quarter.
The new figures show that the Econbrowser recession indicator index is at 4.0%, a historically low level that suggests the economic expansion that began in the third quarter of 2020 is clearly continuing.
GDP-based recession index. The values plotted for each date are based only on publicly available GDP figures for the quarter following the date shown, with the last date shown being Q1 2024. The shaded areas represent NBER recession dates, which were not used in any way to construct the index.
Many analysts noted that the Q2 estimate of 2.8% was a significant improvement over the Q3 estimate of 1.4%. However, inventory fluctuations, which tend to be temporary, account for most of the difference. If inventory had not decreased in Q1, actual final sales would have increased by 1.8%, while if inventory had not built up in Q2, actual final sales would have increased by only 2.0%.
To quote Mark Twain, reports of the demise of the American economy have been greatly exaggerated.
