Friday, January 28, 2011

USA 2010 Annual GDP Estimated at +2.9% (Annual GDP Chart) *2009 GDP was -2.6%*

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Bureau of Economic Analysis: USA Annual GDP Estimate


USA 2010 Annual GDP Advance Estimate +2.9%

Official Statement by the Bureau of Economic Analysis is at bottom of this post.

USA Annual 2010 GDP Advance Estimate The Bureau of Economic Analysis released the Advance Estimate of 2010 Annual GDP which was +2.9%, for a total GDP of $14.66 trillion. The advance estimate of the Annual 2010 GDP is a +5.5% improvement over the 2009 Annual GDP of -2.6%. The 2010 Annual GDP is the highest since 2005 (+3.1%). The USA GDP had decreased for 4 consecutive years (2006 through 2009) before this increase in 2010.

GDP +3.0% A +3.0% annualized GDP growth rate is generally accepted as the minimum necessary to generate some jobs  growth. Therefore, the USA economy grew at a rate in Q4 2010 to create some jobs and bring down the unemployment rate. The Big Question: where is the USA economy headed? Three scenarios are usually discussed: 1) a double dip recession whereby the GDP will turn negative, 2) the economy will continue "bottom bouncing" with very slow growth and a continuing high unemployment rate (i.e., less than or near +3.0% growth), or 3) the bottom is in and GDP growth will accelerate to above +3.0% and continue above, jobs will be created, and the unemployment will continue to decrease. Scenario 2) with USA slow economic growth appears to be the consensus for 2011.

USA GDP % by Year (Chart) The chart below is the annualized percentage change of the GDP (seasonally adjusted at annual rate) from the preceding year (YoY), the most common annual GDP measure. As can be seen, there was a dip in 2001 to +1.1%. The USA economy then recovered to a peak of +3.6% in 2004. Five consecutive annual declines ensued culminating in the Great Recession and a cyclical bottom in 2009 at -2.6%. 2008 was 0.0% and shows as a blank on the chart. The chart covers the last 16 years of the USA GDP as reported by BEA from 1995 through 2010 (advance estimate).




The Bureau of Economic Analysis Commentary on the 2010 GDP of +2.9% (Advance Estimate)

2010 GDP

Real GDP increased 2.9 percent in 2010 (that is, from the 2009 annual level to the 2010 annual level), in contrast to a decrease of 2.6 percent in 2009.

The increase in real GDP in 2010 primarily reflected positive contributions from private inventory investment, exports, personal consumption expenditures (PCE), nonresidential fixed investment, and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.

The upturn in real GDP primarily reflected upturns in exports, in nonresidential fixed investment, in PCE, and in private inventory investment and a smaller decrease in residential fixed investment that were partly offset by an upturn in imports.

The price index for gross domestic purchases increased 1.3 percent in 2010, in contrast to a decrease of 0.2 percent in 2009.

Current-dollar GDP increased 3.8 percent, or $540.2 billion, in 2010. In contrast, current-dollar GDP decreased 1.7 percent, or $250.1 billion, in 2009.

During 2010 (that is, measured from the fourth quarter of 2009 to the fourth quarter of 2010), real GDP increased 2.8 percent. Real GDP increased 0.2 percent during 2009. The price index for gross domestic purchases increased 1.2 percent during 2010, compared with an increase of 0.5 percent during 2009.


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