Let’s Not Get Too Excited about Recent GDP Growth

According to the U.S. Department of Commerce’s Bureau of Economic Analysis,

Real gross domestic product — the value of the production of goods and services in the United States, adjusted for price changes — increased at an annual rate of 5.0 percent in the third quarter of 2014, according to the “third” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 4.6 percent.

Sounds great, but let’s put recent quarter-to-quarter and year-over-year changes in context:

Quarterly vs. annual changes in real GDP

Despite the recent gains, welcome as they are, GDP remains in the doldrums:

Real GDP 1947q1-2014q3

Here’s another depiction, which emphasizes the declining rate of growth:

Real GDP 1947-2014

For more, see “The Rahn Curve Revisited” and the list of posts at the bottom.