Sunday, October 31, 2010

Average GDP Growth of 2.81% Over Last 5 Quarters Compares Favorably to the Last Two Expansions

We're now in the fifth quarter of economic expansion since the recession officially ended in June 2009. How does this economic expansion compare to the last two? Most reports describe the recovery as "sub-par," "weak," "fragile," and "anemic," etc.

And yet real GDP growth over the last five quarters of expansion (1.6%, 5%, 3.7%, 1.7% and 2% for an average of 2.81%) compares very favorably with the five-quarter periods following the 2001 recession (3.5%, 2.1%, 2%, 0.1% and 1.6%, for an average of 1.87%) and the 1990-1991 recession (2.7%, 1.7%, 1.6%, 4.5% and 4.3% for an average of 2.96%). Based on average real GDP growth (subject to revisions of third quarter GDP) for the five quarters following recession, this expansion is stronger than the 2002 expansion by almost a full percentage point (2.81% vs. 1.87%), and just slightly below the 1991-1992 period (2.96%).