Thursday, June 18, 2009

Monthly GDP for April rose by +0.3% (+3.8% annualized), Q2 tracking for a -1.1% 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 modestly in April by +0.3% or +3.8% annualized, after falling slightly by -0.3% in March (revised down from +0.2%), and real Q2 GDP is forecast to decline by -1.1% 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 April:

Monthly GDP rose 0.3% in April.  This followed a 0.3% decline in March that was revised down from a previously reported 0.2% increase.  After falling sharply over most of the second half of last year, monthly GDP has trended only modestly lower since December.  The increase in monthly GDP in April was largely accounted for by an increase in nonfarm inventory investment, as inventories were pared less sharply in April than in March.  The level of monthly GDP in April was 0.6% above the first-quarter average at an annual rate.  Average monthly declines of 0.4% per month in May and June would support our latest tracking forecast of a 1.1% decline of real 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 -6.1% in Q1 from Q4.

If the NBER BCDC is the definitive expert on marking of recessions, MA is the definitive expert on calculating real GDP at the monthly level with their MGDP data series.

-- Jack Krupansky

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