Monthly GDP rose 1.2% (15.8% annualized) in July

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 by a very sharp +1.2% in July or +15.8% annualized, after declining a cumulative -0.8% over the previous two months (May and June), and real Q3 GDP is forecast to rise by +1.5% 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 July:

Monthly GDP rose 1.2% in July, more than reversing declines over the previous two months.  The large increase in monthly GDP in July was more than accounted for by large contributions from net exports and inventory investment.  Domestic final sales declined moderately in July.  The level of monthly GDP in July was 3.3% above the second-quarter average at an annual rate.  We view the level of nonfarm inventory investment in July to be unsustainably high, so we look for a large decline in August.  This is the primary reason we assume a 0.7% decline in monthly GDP in August.  This assumption underlies our latest tracking forecast of 1.5% growth of real GDP in the third quarter.

GDP is now back up to its level in October 2007, shortly before the recession began, but that is with the boost of extraordinary monetary and fiscal stimulus, so we are by no means out of the woods yet even if the recession is essentially over (as of July 2009, in my estimation.)

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