The Bureau of Economic Analysis announced today that seasonally adjusted US real GDP grew 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 what is now an impressive record for an economy that continues to fluctuate despite frequent predictions of its imminent demise.
Quarterly real GDP growth at annual rate, 1947:Q2-2024:Q2, historical average (3.1%) in blue. Calculated as 400 times the difference in the natural log of real GDP from the previous quarter.
The new numbers put the Econbrowser recession index at 4.0%. That is historically the lowest level, reflecting the steady continuation of economic growth that began in 2020:Q3.
An index of economic recession based on GDP. The projected value for each day is based only on GDP numbers that were publicly available from one quarter after the date shown, with 2024:Q1 being the last date shown on the graph. Shaded regions represent NBER recession days, which are days that were not used in any way in the construction of the index.
Many analysts noted that the 2.8% Q2 estimate appears to be a significant improvement over Q3’s 1.4%. But inventory changes, which are often fleeting, make a big difference. Without the inventory drawdown in Q1, actual final sales would have been 1.8%, and without inventory building in Q2, actual final sales would have been only 2.0%.
To paraphrase Mark Twain, reports of the death of the US economy have been greatly exaggerated.
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