Monthly GDP for July fell by -0.4% (-5.0% annualized), Q3 tracking for a 1.5% 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, fell moderately in July (-0.4% or -5.0% 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 declined 0.4% in July.  Growth of monthly GDP was revised up for June to 1.0% from 0.7% previously.  The decline in monthly GDP in July was roughly accounted for by declines in PCE and net exports.  The level of Monthly GDP in July was 2.0% above the second-quarter average at an annual rate.  Our latest tracking forecast of 1.5% growth of GDP in the third quarter assumes average monthly declines of about 0.1% per month in August and September.

Although GDP declined in July, it was still higher than May and January, the previous peak months before June. Regardless of the doom and gloom promoted by the Democrats, this economy is still refusing to fall into an outright recession.

It is curious that MA is forecasting that monthly GDP will decline for three consecutive months (July, August, and September), 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