US GDP Growth Accelerates from a Crawl to a Walk in Q1
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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

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 US GDP Growth Accelerates from a Crawl to a Walk in Q1 Presentation Transcript

  • Economics for your Classroom fromEd Dolan’s Econ BlogUS GDP Growth Acceleratesfrom a Crawl to a Walk in Q1Posted April 16, 2013Terms of Use: These slides are provided under Creative Commons License Attribution—Share Alike 3.0 . You are freeto use these slides as a resource for your economics classes together with whatever textbook you are using. If you likethe slides, you may also want to take a look at my textbook, Introduction to Economics, from BVT Publishing.
  • April 26, 2013 Ed Dolan’s Econ BlogUS GDP Growth rises to 2.5 Percent in Q1 2013 The advance estimate from theBureau of Economic Analysis showsUS GDP growth rising to 2.5 percentin the first quarter of 2013, after aweak 0.4 percent showing in Q42012 It was the fastest growth rate sinceQ4 2011, and close to what manyanalysts believe is the long-runpotential growth rate for the USeconomy
  • Expansion Interrupted According to standard business cycleterminology, the recession phase of thebusiness cycle is the downwardmovement of GDP from its previouspeak The recovery phase is the upwardmovement from the trough (low point)of the recession and continues untilGDP again reaches its previous peak. Once GDP moves above its previouspeak, the expansion phase begins. The expansion resumed in Q1 2013after almost stalling in Q4 2012April 26, 2013 Ed Dolan’s Econ Blog
  • Sources of Growth by Sector Consumption contributed 2.24 percentagepoints to Q4 growth, mostly services Investment contributed 1.56 percentagepoints. Fixed investment was lower than inQ4 while inventories grew strongly Exports contributed positively to growth butnet exports were negative because importsgrew faster than exports The government sector also made anegative contribution to growth; details onthe next sideContribution by sector to the2.5% GDP growth in Q1 2013Note: Imports are recorded in the nationalaccounts with a negative sign, so thenegative 0.9 percent shown here representsan increase in importsApril 26, 2013 Ed Dolan’s Econ Blog
  • Fiscal Drag Continues The government contribution to GDPgrowth, as measured by governmentconsumption expenditure and grossinvestment, has been negativethroughout most of the recovery Government spending growth turnedpositive in Q3 2012, but negativegrowth returned in Q4 and continuedin Q1 2013 Economists refer to the negativeimpact on GDP of falling governmentspending as fiscal drag. Politicalgridlock over spending and taxes isexpected to increase fiscal drag laterthis yearApril 26, 2013 Ed Dolan’s Econ Blog
  •  For furtherdiscussion of theGDP data, readthis post Check out theseposts for moreslideshows andanalysis of USmacroeconomicdata: March 2013inflation data March 2013employmentsituationApril 26, 2013 Ed Dolan’s Econ Blog
  •  For furtherdiscussion of theGDP data, readthis post Check out theseposts for moreslideshows andanalysis of USmacroeconomicdata: March 2013inflation data March 2013employmentsituationApril 26, 2013 Ed Dolan’s Econ Blog