US real GDP grew at a 1.7 percent annual rate i Q2 2013, beating expectations. Newly revised data show that the recent recession was shallower than previously thought and the recovery somewhat stronger
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US GDP Growth Beats Expectations in Q2, Recovery Stronger than Previously Reported
1. Economics for your Classroom from
Ed Dolan’s Econ Blog
US GDP Growth for Q2 13
Beats Expectations, Revisions
Show Stronger Recovery
Posted July 31, 2013
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2. July 31, 2013 Ed Dolan’s Econ Blog
US GDP Grows at 1.7 Percent Rate in Q2 2013
The advance estimate from the
Bureau of Economic Analysis
showed US GDP growing at a 1.7
percent annual rate in the second
quarter of 2013.
That was up from 1.1 percent in Q1
2013 and 0.1 percent in Q4 2012.
The latest BLS report contained
major revisions of data for earlier
periods. Growth for the previous two
quarters had been reported earlier at
0.4 percent for Q4 and 1.8 percent
for Q1
3. 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.
July 31, 2013 Ed Dolan’s Econ Blog
4. Recession Shallower, Recovery Stronger than Previously Reported
This chart shows newly revised and
previously released data
For comparison, both series are
rebased on a scale with the peak of the
previous cycle Q4 2007 equal to 100
The chart shows that the recession was
not quite so deep as previously
reported, and the recovery somewhat
stronger
The new data show GDP in Q1 2013 to
have been 3.9 percent above the 2007
peak, rather than 3.0 percent as
previously reported. In Q2, it increased
to 4.4 percent above the previous peak
July 31, 2013 Ed Dolan’s Econ Blog
5. Sources of Growth by Sector
Consumption contributed 1.22 percentage
points to Q2 growth, including both goods
and services
Investment contributed 1.34 percentage
points. Fixed investment was much
stronger than in Q1 while inventories grew
a little slower
Exports resumed growth after a brief
decrease in Q1. Imports increased more
than exports, so the contribution of net
exports was negative
The government sector also made a
negative contribution to growth, but the
decrease was smaller than in Q1
Contribution by sector to the
1.7% GDP growth in Q2 2013
Note: Imports are recorded in the national
accounts with a negative sign, so the -1.51
percent shown here represents an increase
in imports
July 31, 2013 Ed Dolan’s Econ Blog
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7. Click here to learn more about Ed Dolan’s Econ texts
or visit www.bvtpublishing.com
For more slideshows, follow Ed Dolan’s Econ Blog
Follow @DolanEcon on Twitter