Already Weak, US GDP Growth in Q2 2011 is Revised Downward


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Already weak US Growth for Q2, 2011 is revised downward to 1 percent.

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Already Weak, US GDP Growth in Q2 2011 is Revised Downward

  1. Data for the Classroom from Ed Dolan’s Econ Blog US GDP: Already Weak, Q2 Growth Revised Downward Posted Aug. 27, 2011 Terms of Use: These slides are made available 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 Publishers.
  2. US GDP Growth Q2 2011 <ul><li>US GDP grew at an estimated 1% annual rate in Q2 2011 </li></ul><ul><li>The January-March 2011 quarter was the 8 th consecutive quarter of growth since the end of the recession that lasted from Dec 2007 to Jun 2009 </li></ul><ul><li>The growth rate of 1% disappointed many observers. It was revised downward from 1.3 percent previously estimated for the quarter. </li></ul><ul><li>About 2.5% growth of GDP is needed to keep unemployment from rising, when increases in the labor force and productivity are taken into account </li></ul>Posted Aug. 27, 2011 on Ed Dolan’s Econ Blog
  3. Phases of the Business Cycle <ul><li>According to standard business cycle terminology, the recession phase of the business cycle is the downward movement of GDP from its previous peak </li></ul><ul><li>The recovery phase is the upward movement from the trough (low point) of the recession and continues until GDP reaches its previous peak. </li></ul><ul><li>Once GDP moves above its previous peak, the expansion phase begins </li></ul><ul><li>Following this terminology, we see that the recovery, underway for two years, is not yet complete, and the economy has not yet entered the expansion phase of the cycle </li></ul>Posted Aug. 27, 2011 on Ed Dolan’s Econ Blog
  4. Sources of US GDP Growth Q2 2011 <ul><li>Consumption accounted for about a third of the growth in Q2 2011 </li></ul><ul><li>Investment accounted for 0.78 percentage points of growth, with strong business fixed investment helping to make up for weak residential investment </li></ul><ul><li>Federal government spending grew slightly but was more than offset by continued decline of state and local government spending </li></ul><ul><li>Net exports grew slightly. Export performance remained good but not as strong as previously estimated, and imports grew faster than previously estimated. </li></ul>Posted Aug. 27, 2011 on Ed Dolan’s Econ Blog Table shows the contribution of each sector to the 1% total GDP growth in Q2, 2011