Wednesday, December 14, 2011

Monthly GDP finally makes a new high, completing recovery from the recession

Macroeconomic Advisers (MA), the people who calculate GDP at the monthly level (as used by the NBER Business Cycle Dating Committee), just released their estimate of GDP for the month of October which shows that GDP has now fully recovered from the recession, finally.
 
Annualized real GDP for October was $13.499 trillion, which blows past GDP of $13.388 trillion at the start of the recession in December 2007, as well as the peak for monthly GDP which was $13.448 in June 2008 (due to tax rebate checks in May, June, and July as per the Economic Stimulus Act of 2008.)
 
I wouldn't bill this so much as great news, but simply as a significant milestone.
 
Now, if only employment could recover as much lost ground. Industrial Production and personal income are also still lagging in the recovery from the recession. My own personal estimate is that it may take another three to five years for the recovery to complete, at least on the employment front, although industrial production and personal income will likely snap back more rapidly than employment.
 
MA notes that half of the the sharp rise GDP in October will likely reverse in November, but they still stick with their tracking forecast of annualized real GDP growth of +3.7% for Q4.

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