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Tuesday, July 4, 2017

Great Depression vs. Great Recession GDP Growth Rates - Third Estimate of the First Quarter of 2017

Last Thursday, June 29, 2017, the Bureau of Economic Analysis released their third estimate of 2017's first quarter GDP growth rate: 1.40%. For the fourth quarter of 2016, GDP grew by 2.1%.

The economic recovery from the Great Recession has been downright sluggish, never taking off beyond the 3.00% growth rate that signals a robust economic recovery and always flirting with the 1.00% growth rate that signals a stalling economy.

On a nominal basis, the economy is 31% larger than what it was ten years ago. In real terms, it's just 13% larger.

On a per capita basis, real GDP grew by only 5.34% for the past ten years, for a compounded annual average growth rate of only 0.52% per annum - far less than the so-called "Hindu Rate of Growth" threshold of 1.30% per annum. This growth rate is so slow that it is almost imperceptible.

To top it all, the growth has not been evenly distributed. As of year-end 2015, Real Median Household Income stood at $56,516 or 1.58% below the Real Median Household Income of $57,423 in 2007 and 2.41% below that of 1999 ($57,909). Almost all the gains in the economy have been going to the upper echelons of US society.

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