this Bureau of Economic Analysis It was announced today that the seasonally adjusted annual real GDP growth rate of the United States in the fourth quarter was 3.3%. This increase brings GDP levels 3.1% higher than a year ago. These figures are consistent with the historical average GDP growth rate of 3.1% over the past 70 years, which is much higher than the 2% average over the past 20 years. The outcome of 2023 is far better than many expected.
Annual real GDP growth rate, 1947 Q2 to 2023 Q4, historical average (3.1%) in blue. Calculated as 400 times the natural logarithm difference between GDP and the previous quarter.
Strong growth over the past two quarters has brought Ecobrowser Recession Indicator Index All the way down to 0.9%. Despite difficulties in the first half of 2022, the U.S. expansion is now 3-1/2 years old.
GDP-based recession indicator index. The values plotted for each date are based only on publicly available GDP data for the quarter after the specified date, with Q3 2023 being the last date shown on the chart. The shaded area represents the NBER's recession date, which was not used in any way in constructing the index.
Inventory accumulation drove strong third-quarter numbers. In contrast, the fourth quarter was all driven by final sales growth. Even residential fixed investment, which we might expect to bear the brunt of the Fed's tightening measures, continues to make a small positive contribution to GDP growth.
Annual inflation, as measured by the implicit personal consumption expenditures deflator, remains higher than the Fed wants. But it's been declining, and if we were to judge just on a 6-month or 3-month rate, we'd say mission accomplished.
Three measures of annual inflation.Above: Natural logarithm of 100 times change in years Personal consumption expenditures implied price deflator. Middle panel: 200x 6-month change. Below: 400x change over 3 months. The blue line corresponds to an inflation rate of 2%.
So far, so good.
