Wednesday, July 16, 2008

Monthly GDP for May rose by 0.1% (1.1% annualized), April revised to a 0.5% gain (5.8% annualized), Q2 tracking for a 2.9% annualized gain

Monthly real GDP, one of the five primary economic indicators that the NBER Business Cycle Dating Committee uses to judge recession start and end dates, rose very modestly in May (+0.1% or +1.1% annualized) and was revised up from no change to a 0.5% gain (+5.8% annualized) for April, according to Macroeconomic Advisers (MA). The government does not publish GDP data at a monthly level, but the NBER BCDC says that they refer to sources such as Macroeconomic Advisers (MA) and their MGDP data series. As as Macroeconomic Advisers put the report for March:

Monthly GDP rose 0.1% in May following a 0.5% increase in April.  The April increase was revised from roughly no change as initially reported.  The small increase in monthly GDP in May reflected increases in net exports and domestic final sales that were nearly offset by a sharp decline in inventory investment and a small (assumed) decline in the portion of monthly GDP not covered by the monthly source data.  The level of monthly GDP in May was 2.3% above the first-quarter average at an annual rate.  Our latest tracking estimate of 2.9% growth of GDP in the second quarter assumes a 0.6% increase in monthly GDP in June.

Real GDP is now once again at an all-time high. It had peaked in January and then fell sharply in February, but has risen for three consecutive months to establish a new peak.

If you are looking for evidence of a recession, it is not there in the GDP data. Although I do agree with "Dr. Phil" Gramm that we are in a "mental recession."

If the NBER BCDC is the definitive expert on marking of recessions, MA is the definitive expert on measuring real GDP at the monthly level with their MGDP data series.

-- Jack Krupansky

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