THE Economic Analysis Bureau The IMF reported today that seasonally adjusted U.S. real GDP grew at an annual rate of 2.8 percent in the first quarter. That’s close to the long-run historical average of 3.1 percent, and confirms what has become a pretty impressive record for an economy that continues to grow despite constant predictions of its imminent demise.
Quarterly real GDP growth at annual rate, 1947:Q2-2024:Q2, with historical average (3.1%) in blue. Calculated as 400 times the difference between the natural logarithm of real GDP and the previous quarter.
The new figures place the Econbrowser Recession Index at 4.0%, a historically very low level, which indicates an unambiguous continuation of the economic expansion that began in the third quarter of 2020.
GDP-based recession indicator index. The value shown for each date is based only on GDP figures that were publicly available one quarter after the date shown, with 2024:Q1 being the latest date shown on the chart. The shaded areas represent NBER recession dates, which were not used in the construction of the index in any way.
Many analysts have noted that the 2.8% estimate for the second quarter appears to be a marked improvement over the 1.4% estimate for the third quarter. But inventory fluctuations, which tend to be transitory, explain most of the difference. Without the first-quarter inventory drawdown, real final sales would have increased 1.8%, and without the second-quarter inventory buildup, real final sales would have increased only 2.0%.
To paraphrase Mark Twain, reports of the death of the American economy have been greatly exaggerated.
