US GDP Grows 3.2 Percent in Q4 2013, Plus a Look atGDP Per Capita

Economics for your Classroom from Ed Dolan’s Econ Blog US GDP Grows 3.2 Percent in Q4 2013, Plus a Look at GDP Per Capita Posted January 30, 2014 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.

US GDP Registers 3.2 Percent Growth in Q4 2013  The advance estimate from the Bureau of Economic Analysis showed US GDP growing at a 3.2 percent annual rate in the fourth quarter of 2013  That brought growth for the full year since Dec. 2012 to 2.74 percent, just slightly below the 2.77 percent for 2010, which was the strongest year of the recovery January 30, 2014 Ed Dolan’s Econ Blog

Phases of the Business Cycle  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 latest data show that the expansion is continuing. Real GDP is now 6.5 percent above the previous peak January 30, 2014 Ed Dolan’s Econ Blog

Sources of Growth by Sector  Most of the Q4 growth came from stronger consumption, which contributed 2.26 percentage points  Investment contributed a weak 0.56 percentage points, well below the recent average  Exports grew very strongly and imports barely increased  The government sector made an unusually large negative contribution to growth, due in part to the partial government shutdown Contribution by sector to the 3.2% GDP growth in Q4 2013 Note: Imports are recorded in the national accounts with a negative sign, so the -0.15 percentage points shown here represents an increase in imports January 30, 2014 Ed Dolan’s Econ Blog

Export Growth Resumes after a Pause  Exports showed renewed strength in Q4 2013, despite weaknesses in many U.S. trading partners  Exports had played a big role in early stages of the recovery, but had entered a slump in late 2012 and early 2013 January 30, 2014 Ed Dolan’s Econ Blog

Tracking Real GDP Per Capita  All of the data shown so far are for total real GDP. If we are interested in a country’s standard of living, it is also useful to track real GDP per capita  The US population is growing about 0.7 percent per year, so GDP per capita lags behind total GDP  This chart reports both series as index numbers where Q4 2007 (the peak of the previous cycle) equals 100  Whereas total real GDP is 6.5% above its previous peak, real GDP per capita is less than 2% above its previous peak January 30, 2014 Ed Dolan’s Econ Blog

International Comparisons: Total Real GDP Measured by total real GDP, the U.S. economy is the second-fastest growing of the G7, behind Canada and followed by Germany, Japan, and France January 30, 2014 Ed Dolan’s Econ Blog

International Comparisons: Real GDP Per Capita The rankings look different when we switch to per-capita real GDP. Germany and Japan, where population is shrinking, move up in the rankings. Countries like Canada, the US, and France where population growth is still strong, move down. January 30, 2014 Ed Dolan’s Econ Blog

For more slideshows, follow Ed Dolan’s Econ Blog Follow @DolanEcon on Twitter Click here to learn more about Ed Dolan’s Econ texts or visit www.bvtpublishing.com