Friday, July 17, 2009

Monthly GDP for May rose by +0.3% (+4.3% annualized), Q2 tracking for a -0.6% 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 May by +0.3% or +4.3% annualized, after falling modestly by -0.2% in April (revised down from +0.3%), and real Q2 GDP is forecast to decline by -0.6% 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 May:

Monthly GDP rose 0.3% in May, and what was initially reported as a 0.3% increase in April was revised down to a 0.2% decline.  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 May was fully accounted for by a large increase in net exports.  The level of monthly GDP averaged over April and May was 0.3% below the first-quarter average at an annual rate.  Our latest tracking estimate of a 0.6% decline of GDP in the second quarter assumes a 0.4% decline of monthly GDP in June.

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 calculating real GDP at the monthly level with their MGDP data series.

-- Jack Krupansky

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