Monthly GDP for August fell by -0.5% (-5.3% annualized), Q4 tracking for a -3.9% 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 moderately in September (-0.5% or -5.3% 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 summarized GDP in September:

Monthly GDP declined 0.5% in September.  This reflected negative contributions from nonfarm inventory investment and final sales and positive contributions from the portion of monthly GDP not covered by the published monthly source data.  The decline in final sales mainly reflected declines in consumer spending and net exports that were offset by an increase in production of capital goods.  Monthly GDP in September was 2.2% below the third-quarter average at an annual rate.  Our latest tracking forecast of a 3.9% decline of real GDP in the fourth quarter would imply average monthly declines of monthly GDP of 0.2% per month (not annualized) from October through December.

September marked a third consecutive monthly decline in real GDP off of the June peak and lower than the GDP level in December 2007.  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.

The NBER BCDC still has not yet called the start date of the recession, but with September GDP below December 2007 GDP, it is quite clear that the U.S. economy is in a recession.

The August GDP decline was revised from -1.1% to -0.7%.

Annualized nominal GDP is running at $14.40 trillion. Annualized real GDP is running at $11.65 trillion.

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