Tuesday, May 19, 2009

Monthly GDP for March rose by +0.2% (+2.4% annualized), Q2 tracking for a -1.0% 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 modestly in March by +0.2% or +2.4% annualized, after falling slightly by -0.1% in February (revised down from +0.6%), and real Q2 GDP is forecast to decline by -1.0% 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 March:

Monthly GDP rose 0.2% in March following small declines in the two previous months and a large decline in December.  The modest gain in March was more than accounted for by nonfarm inventories, which contracted sharply in March, but not nearly as sharply as in February.  Partially offsetting this (and other minor positive contributions) were negative contributions from PCE, net exports, and the portion of monthly GDP not explicitly covered by monthly source data.  The March level of monthly GDP was 0.4% above the first-quarter average at an annual rate.  Average monthly declines of 0.2% per month through June support our latest tracking forecast of a 1.0% decline of GDP in the second quarter.

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

From the MA monthly data, I calculate that annualized real GDP fell at a rate of -5.5% in Q1 from Q4.

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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