Recovery? Nominal GDP Above 5% Only Once Under President Obama (And Real GDP Above 3% Only Once)

Confounded Interest ^ | 11/17/2013 | Anthony B. Sanders

[whitedog57]

While economists mostly focus on real gross domestic product (GDP) growth, let’s look at nominal GDP growth for a change. If we go back to 1948 and President Harry Truman, you can see the number of times that nominal GDP growth (Year-over-year) exceeded 5%.

nomgdpyoy

And if we count the number of times nominal GDP equaled or exceeded 5%, we can see a pattern developing. Under President Obama, nominal GDP exceed 5% only once (5.2% for Q1 2012). The last President that experienced 5% or more nominal GDP growth was Ronald Reagan.

gdpgt5

But even under the much-maligned President Jimmy Carter, nominal GDP was growing at a blistering rate of over 10% for most of his Presidency until 1980 when it slowed.

Of course, inflation was high under Carter leading to slower REAL GDP growth. Here is a chart of nominal GDP growth and CPI growth less food and energy (orange line).

nomgdpinflessfoodenergu

If we look at the chart of real GDP growth, it has only exceeded 3% growth once under President Obama (Q1 2012 at 3.3%). I marked 0% real GDP growth with a black line and 3% real GDP growth with a red line.

realgdpyoy

To put it mildly, the economy has been growing at an all-time lower rate. When Jimmy Carter experienced 10% plus nominal GDP growth, President Obama is stuck at the bottom with only 1 quarter of nominal GDP growth above 5% and 1 quarter above 3% real GDP growth.

And that assumes that the CPI is accurately measuring inflation. Odd, it seems that everyone I buy is growing far faster than the government’s inflation rate.

I will believe that we are in recovery mode when nominal GDP exceeds 5% for 2 successive quarters or more and real GDP exceeds 3% for 2 successive quarters or more. Until then …

And we get the civilian employment-to-population ratio above the levels last seen under President “Malaise” Carter.

EMRATIO111713

Then perhaps we will see real growth in the housing market, not just a bubble induced by The Fed’s cheap money policies. And please undertake economic policies to INCREASE real median household income, not decrease it.

csrealmedhinc

[whitedog57]

Obama/Democrat French-like welfare state/regulation economic growth. We are doomed at this rate.

[Diana in Wisconsin]

[Diana in Wisconsin]

2016 - 2020 can pretty much be colored in gray ALREADY!

[Rodamala]

Please note that Gross Domestic Product INCLUDES GOVERNMENT SPENDING. Even with sequestration... government spending is still increasing... so there is a valid component of the GDP growth rate that is attributed to throwing billions... TRILLIONS of taxpayer money into the economy.

GDP is only a valid economic indicator in my mind when governmental expenditures are accountable. Having some government agency piss money away on a study of the social habits of gay killer whales does not contribute to a thriving economy.

[Skepolitic]

If inflation were properly accounted for in the GDP deflator and the deadweight loss of the Obama stimulus were properly discounted, it would be all gray after 2008.