Monthly GDP for August fell by -1.1% (-12.5% annualized), Q3 tracking for a -0.3% annualized loss

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 sharply in August (-1.1% or -12.5% annualized) , according to Macroeconomic Advisers (MA). The government does not publish GDP data at a monthly level, but the NBER Business Cycle Dating Committee says that they refer to sources such as Macroeconomic Advisers (MA) and their MGDP data series. As Macroeconomic Advisers put the report for August:

Monthly GDP declined 1.1% in August following a 0.1% decline in July.  The 1.2% decline over July and August only partially reversed a 1.6% increase over the prior two months.  While there have been several 2-month increases of 1.6% or better in the short history of monthly GDP (since early 1992), there has never been a two-month decline as large as 1.2%.  The closest was a 0.9% decline in the midst of the 2001 recession.  The decline in monthly GDP in August was largely accounted for by a sharp decline in nonfarm inventory investment.  Our latest tracking estimate of a 0.3% decline in GDP in the third quarter assumes essentially no change in monthly GDP in September.

August marked a second consecutive decline in real GDP off of the June peak. Unfortunately, the data is distorted due to the Spring tax rebate stimulus checks that probably impacted July and maybe even August. August was below May, June, and July, and modestly below January, but higher than all other months. In terms of recession dating, you could pick June as the clear peak, or maybe January if you want to discount the tax rebate stimulus as artificial.

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