US GDP Growth Accelerates from a Crawl to a Walk in Q1
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US GDP grew at a 2.5% annual rate in Q1 2013, up sharply from the 0.4% of Q4 2012
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US GDP Growth Accelerates from a Crawl to a Walk in Q1
- 1. Economics for your Classroom from Ed Dolan’s Econ Blog US GDP Growth Accelerates from a Crawl to a Walk in Q1 Posted April 16, 2013 Terms of Use: These slides are provided under Creative Commons License Attribution—Share Alike 3.0 . You are free to use these slides as a resource for your economics classes together with whatever textbook you are using. If you like the slides, you may also want to take a look at my textbook, Introduction to Economics, from BVT Publishing.
- 2. April 26, 2013 Ed Dolan’s Econ Blog US GDP Growth rises to 2.5 Percent in Q1 2013 The advance estimate from the Bureau of Economic Analysis shows US GDP growth rising to 2.5 percent in the first quarter of 2013, after a weak 0.4 percent showing in Q4 2012 It was the fastest growth rate since Q4 2011, and close to what many analysts believe is the long-run potential growth rate for the US economy
- 3. Expansion Interrupted According to standard business cycle terminology, the recession phase of the business cycle is the downward movement of GDP from its previous peak The recovery phase is the upward movement from the trough (low point) of the recession and continues until GDP again reaches its previous peak. Once GDP moves above its previous peak, the expansion phase begins. The expansion resumed in Q1 2013 after almost stalling in Q4 2012 April 26, 2013 Ed Dolan’s Econ Blog
- 4. Sources of Growth by Sector Consumption contributed 2.24 percentage points to Q4 growth, mostly services Investment contributed 1.56 percentage points. Fixed investment was lower than in Q4 while inventories grew strongly Exports contributed positively to growth but net exports were negative because imports grew faster than exports The government sector also made a negative contribution to growth; details on the next side Contribution by sector to the 2.5% GDP growth in Q1 2013 Note: Imports are recorded in the national accounts with a negative sign, so the negative 0.9 percent shown here represents an increase in imports April 26, 2013 Ed Dolan’s Econ Blog
- 5. Fiscal Drag Continues The government contribution to GDP growth, as measured by government consumption expenditure and gross investment, has been negative throughout most of the recovery Government spending growth turned positive in Q3 2012, but negative growth returned in Q4 and continued in Q1 2013 Economists refer to the negative impact on GDP of falling government spending as fiscal drag. Political gridlock over spending and taxes is expected to increase fiscal drag later this year April 26, 2013 Ed Dolan’s Econ Blog
- 6. For further discussion of the GDP data, read this post Check out these posts for more slideshows and analysis of US macroeconomic data: March 2013 inflation data March 2013 employment situation April 26, 2013 Ed Dolan’s Econ Blog
- 7. For further discussion of the GDP data, read this post Check out these posts for more slideshows and analysis of US macroeconomic data: March 2013 inflation data March 2013 employment situation April 26, 2013 Ed Dolan’s Econ Blog