Tuesday, April 21, 2009

Monthly GDP for February rose by +0.6% (+7.0% annualized), Q1 tracking for a -5.1% annualized decline

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 moderately in February by +0.6% or +7.0% annualized, after falling modestly by -0.3% in January (revised down from +0.2%), and real Q1 GDP is forecast to decline by -5.1% 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 for Febuary:

Monthly GDP rose 0.6% in February following a 0.3% decline in January that was revised down five-tenths from a previously estimated 0.2% increase.  The jump in monthly GDP in February was more than accounted for by a sharp rise in net exports.  Partially offsetting this were negative contributions from PCE, capital goods, construction, and nonfarm inventory investment.  Averaged over January and February, monthly GDP was 3.9% below the fourth-quarter average at an annual rate.  Our latest tracking estimate of a 5.1% decline in GDP in the first quarter includes a 1.2% decline in monthly GDP in March, reflecting a partial reversal in net exports and weakness in PCE and inventory investment.

This report does not necessarily herald the return of happy days, but at least it is not indicating a worsening of the trend.

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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