USA Fourth Quarter GDP Estimated at +3.0%, a 6-Quarter High

Bureau of Economic Analysis: Gross Domestic Product


USA GDP Q4 2011 The Bureau of Economic Analysis released the third (final) estimate of Q4 2011 GDP which was +3.00% QoQ, a 6-quarter high, the highest since Q2 2010 (+3.8%). The total GDP was $15.32 trillion (annualized) and an all-time high. The GDP has increased QoQ for 10 consecutive quarters, since Q3 2009, although growth rates have ranged from a near-abysmal +0.4% in Q1 2011 to an encouraging +3.9% in Q1 2010. A recession in 2012 does not appear probable, but continues as a low risk.

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, with an annual GDP growth projected of approximately +2.0% or less. The average of the 4 quarters reported by the Bureau of Economic Analysis in 2011 is +1.63% (Q1 +0.4%, Q2 +1.3%, Q3 +1.8%, Q4 +3.0%).

USA Real GDP % by Quarter (seasonally adjusted at annual rate) A negative drop into the Great Recession began Q3 2008, followed by a plunge in Q4 2008. The Great Recession continued for 4 quarters until Q2 2009. Positive GDP growth resumed in Q3 2009, the rebound peaking in Q1 2010 at +3.9%, and has continued for 10 consecutive quarters.



USA Real GDP $ by Quarter (seasonally adjusted at annual rate) The USA GDP pre-recession peak was Q2 2008 and the Great Recession low was Q2 2009. USA GDP has now increased 10 consecutive quarters. The Q4 2011 GDP (annualized) exceeds both Q2 2008 ($14.416 trillion) pre-recession peak and the prior Q3 2011 peak ($15.176 trillion) to reach an all-time high of $15.32 trillion.

USA Unemployment Rate Continues at 8.3%, Jobs Remaining to Be Restored 5.3 Million

Bureau of Labor Statistics: Employment Situation Summary


USA Jobs The February 2012 Unemployment Rate remained at 8.3% and the Underemployment Rate dipped to 14.9%. These are post-recession lows, the lowest since February 2009 and January 2009, respectively. The USA economy created 227,000 jobs, the 17th consecutive month of job gains. Net job losses were 8.67 million during the 2008 - 2009 Great Recession. Net job gains have been 3.38 million in the subsequent 2010 - 2012 recovery, leaving 5.29 million jobs to be restored. A high hurdle still confronts the United States to maximize employment, but at least the trend continues slowly in a positive direction.

Unemployment Rate Per the Household Survey Data, the unemployment rate (U-3) remained at 8.3% (preliminary) in February 2012, the lowest since February 2009 (8.2%). The Great Recession cyclical peak was in October 2009 at 10.1%.



Underemployment Rate Per the Household Survey Data, the underemployment rate (U-6) decreased to 14.9% (preliminary) in February 2012, which is a 36-month low, the lowest since February 2009 (15.0%). The Great Recession cyclical peak was in October 2009 at 17.4%.




Total Nonfarm Employment Monthly Net Change Per the Establishment Survey Data, total nonfarm employment monthly net change was +227,000 (preliminary) in February 2012. The total nonfarm employment job losses bottomed during the Great Recession at -818,000 in January 2009. The best jobs gain subsequently has been +516,000 in May 2010, which was mostly attributable to the hiring of census workers. The best non-census jobs gains has been +284,000 in January 2012.




USA Net Jobs Gain (Loss) by Year Per the Establishment Survey Data, total nonfarm employment by year illustrates the Great Recession job losses and subsequent insufficient Recovery rebound. 2007 was the last year to create jobs before the Great Recession, at +902,000 jobs gained. Great Recession job losses began in 2008 at -3.60 million. 2009 was even worse at -5.06 million. This resulted in a total of -8.66 million jobs lost during the Great Recession in 2008 and 2009. Total jobs regained in the 2010 - 2012 recovery to-date have been 3.38 million. The 2012 annual jobs gains is extrapolated from the months reported year-to-date. The pace of job creation in 2012 is on track to create 3+ million jobs.

USA 2011 GDP Estimated at +1.7%, Drops from 2010

USA GDP 2011 The Bureau of Economic Analysis released the second estimate of 2011 GDP which was +1.7% YoY, unchanged from the advance estimate. The total GDP was revised slightly upwards to $15.094 trillion, from the advance estimate $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 a third and estimate announced in 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 the USA 2012 GDP at +2.2%. The OECD estimate is +2.0%, the IMF is +1.8%, and 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 $15.094 trillion in 2011, an all-time high.

USA Fourth Quarter GDP Estimated at +3.0%, a 6-Quarter High

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USA GDP Q4 2011 The Bureau of Economic Analysis released the second estimate of Q4 2011 GDP which was +3.00% QoQ, a 6-quarter high, the highest since Q2 2010 (+3.8%). The total GDP was $15.32 trillion (annualized) and an all-time high. The GDP has increased QoQ for 10 consecutive quarters, since Q3 2009, although growth rates have ranged from a near-abysmal +0.4% in Q1 2011 to an encouraging +3.9% in Q1 2010. There will be a third and final estimate announced in March. A recession in 2012 does not appear probable, but continues as a low risk.

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, with an annual GDP growth projected of approximately +2.0% or less. The average of the 4 quarters reported by the Bureau of Economic Analysis in 2011 is +1.63% (Q1 +0.4%, Q2 +1.3%, Q3 +1.8%, Q4 +3.0%).

USA Real GDP % by Quarter (seasonally adjusted at annual rate) A negative drop into the Great Recession began Q3 2008, followed by a plunge in Q4 2008. The Great Recession continued for 4 quarters until Q2 2009. Positive GDP growth resumed in Q3 2009, the rebound peaking in Q1 2010 at +3.9%, and has continued for 10 consecutive quarters.



USA Real GDP $ by Quarter (seasonally adjusted at annual rate) The USA GDP pre-recession peak was Q2 2008 and the Great Recession low was Q2 2009. USA GDP has now increased 10 consecutive quarters. The Q4 2011 GDP (annualized) exceeds both Q2 2008 ($14.416 trillion) pre-recession peak and the prior Q3 2011 peak ($15.176 trillion) to reach an all-time high of $15.32 trillion.



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