Tuesday, November 24, 2009

Recovery in Perspective: Nominal GDP Edition

Remember that "recovery" we experienced in the third quarter? Turns out nominal GDP bounced a "whopping" 3.2% (down 1% from the initial release). Or to put this figure in perspective, the 42nd highest quarter out of the last 251 (i.e. one of the lowest 17% quarters over the last 50+ years).

And while real GDP is the real production of the economy, nominal GDP is important for a debt burdened economy as debt is in nominal terms. Since the recession started in December 2007 nominal GDP is cumulatively negative (over 7 quarters), something that has not happened since WWII.



Some recovery.

Source: BEA
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4 comments:

  1. EconomicDisconnectNovember 24, 2009 at 2:51 PM

    I am no chart expert, but that looks like an intact long term downtrend from 1979-present. Geting by with less but more debt?

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  2. JakeNovember 24, 2009 at 3:01 PM

    You have to remember that inflation has trended down over that time as well and this is nominal terms.

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  3. EconomicDisconnectNovember 25, 2009 at 9:26 AM

    Well I always miss something.

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  4. The ArthurianNovember 29, 2009 at 4:11 AM

    I keep coming back to this:

    "And while real GDP is the real production of the economy, nominal GDP is important for a debt burdened economy as debt is in nominal terms."

    It is such an important point.

    ReplyDelete