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USA GDP 2011 Advance Estimate The Bureau of Economic Analysis released the advance estimate of 2011 GDP which was +1.7% YoY, for a total GDP of $15.088 trillion. This is a drop from the 2010 GDP of +3.0% YoY. The Great Recession GDPs were -0.3% and -3.5% in 2008 and 2009, respectively. There will be second and third estimates announced in February and March.
Where is the USA Economy Going? 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 yet again with a higher unemployment rate, 2) the economy will continue "bottom bouncing" with slow to very slow growth and a continuing relatively high unemployment rate, or 3) the bottom is in and GDP growth will accelerate and the unemployment rate will begin to decrease. Scenario 2) with slow to very slow economic growth and a continuing relatively high unemployment rate appears to be the most likely scenario for 2012. The World Bank estimates 2012 GDP at +2.2%. The OECD estimate is +2.0%. The IMF is +1.8%. The Conference Board is +1.8%.
USA Real GDP % by Year (seasonally adjusted at annual rate) The peak before the Great Recession was +3.5% in 2004. A downward trend began in 2005 bottoming at -3.5% in 2009. The recovery has been +3.0% in 2010 and +1.7% in 2011.
USA Real GDP $ by Year (seasonally adjusted at annual rate) The pre-recession peak was $14.292 trillion in 2008, followed by a Great Recession drop in 2009 to $13.939 trillion. The recovery has been $14.527 trillion in 2010 and $15.088 trillion in 2011, an all-time high.
Commentary The 2011 USA GDP (advance estimate) of +1.7% is a drop from 2010 and disappointing. The 2012 estimates noted above by The World Bank, OECD, IMF, and The Conference Board range from +1.8% to +2.2%. This would continue the recovery but be flat YoY from 2011 to 2012. A recession in 2012 does not appear probable, but continues as a low risk.
The Bureau of Economic Analysis
Gross Domestic Product: Annual 2011 (advance estimate)
January 27, 2012
Real GDP increased 1.7 percent in 2011 (that is, from the 2010 annual level to the 2011 annual level), compared with an increase of 3.0 percent in 2010.
The increase in real GDP in 2011 primarily reflected positive contributions from personal consumption expenditures (PCE), exports, and nonresidential fixed investment that were partly offset by negative contributions from state and local government spending, private inventory investment, and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.
The deceleration in real GDP in 2011 primarily reflected downturns in private inventory investment and in federal government spending and a deceleration in exports that were partly offset by a deceleration in imports and an acceleration in nonresidential fixed investment.
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