Worse 1Q GDP Helps Rates, Analysis of GDP Last 2.5yrs
The third of three 1Q2010 GDP readings came in today at 2.7% which makes the final reading .5% lower than the initial reading, and it’s now even more significantly lower than 4Q’s +5.6% reading. Stocks lost ground and mortgage bonds rallied on the news, which helped mortgage rates hold onto record lows. The consumer spending component of GDP was 3%, also down .5% from previous readings, but is still above the +1.6% in 4Q. With this final 1Q10 number, we’ve now had three consecutive quarters of GDP growth—following four consecutive quarters of economic contraction (a 60yr record for consecutive GDP declines). As for the consumer spending component of GDP, we’ll get another read on that Monday when the Personal Income & Outlays report is released. All GDP figures are ‘real’ or inflation-adjusted. The last 10 quarters of GDP are at the bottom of this post, and you can also visit our Data section to see historical GDP figures, graphs and download data.
As of November 25, 2008, -0.5% GDP was the largest quarterly decline since the tail end of the last recession in 2001. Six days after that release, the NBER declared a recession had been in effect since December 2007 and also countered the popular definition of recession as two consecutive quarters of negative GDP growth, saying that they evaluate many factors in addition to GDP. This falls well in line with the beginning of the credit crunch in August 2007 and the multi-layered factors that have led to the recession that’s lasted 2.5 years. Recession beginnings and endings are always officially called after the fact, and while 4Q09 and 1Q10 GDP suggest a recovery, 9.7% unemployment suggests otherwise. Here is the press release for today’s figures, and below are all quarterly GDP readings for the last 2.5 years.
GDP Figures Last 2.5 Years
4Q2007: -0.2% (final)
1Q2008: +0.9% (final)
2Q2008: +2.8% (final)
3Q2008: -0.5% (final)
4Q2008: -6.3 (final)
ALL 2008: +0.4% (final)
1Q2009: -6.4% (final)
2Q2009: -0.7% (final)
3Q2009: +2.2% (final)
4Q2009: +5.6 (final)
ALL 2009: -2.4% (final)
1Q2010: +2.7 (final)