Monthly GDP for June rose by 0.7% (9.3% annualized), Q3 tracking for a 1.8% annualized gain

Monthly real GDP, one of the five primary economic indicators that the NBER Business Cycle Dating Committee (NBER BCDC) uses to judge recession start and end dates, rose sharply in June (+0.7% or +9.3% annualized) , according to Macroeconomic Advisers (MA). The government does not publish GDP data at a monthly level, but the NBER Business Cycle Dating Cycle says that they refer to sources such as Macroeconomic Advisers (MA) and their MGDP data series. As as Macroeconomic Advisers put the report for June:

Monthly GDP rose 0.7% in June following a 0.8% increase in May.  The robust growth of monthly GDP over May and June was largely accounted for by sharp gains in net exports.  Inventory investment also provided a significant boost to growth in June.  Domestic final sales, on net, subtracted from growth over May and June.  The level of monthly GDP in June was 3.1% above the second-quarter average at an annual rate.  Our latest tracking forecast of 1.8% growth of GDP in the third quarter assumes average monthly declines of 0.2% per month over July, August, and September.

Real GDP is once again at an all-time high, for the second month in a row. It had peaked in January and then fell sharply in February and slightly in April, but rose strongly in March, May, and June.

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."

It is curious that MA is forecasting that monthly GDP will decline for three consecutive months, a full quarter, but still result in the quarter being higher than the previous quarter. This is simply because the quarterly number is the average for the quarter rather than the ending month of the quarter. The June peak was undoubtably also spiked with the tax rebate checks. It is actually heartening that Q3 will be as strong as MA forecasts, even without the direct influence of those rebate checks.

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