1. Data for the Classroom from
Ed Dolan’s Econ Blog
http://dolanecon.blogspot.com/
US GDP: Private Economy
Grows 2.8% in Q1 2012,
Government Continues to
Shrink
Posted April 28, 2012
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2. Q1 GDP Grows at 2.2 percent, Private Sector at 2.8%
US GDP growth slowed to 2.2% in
Q1 2012, down from 3% in Q4 2011,
according to the advance estimate
from the BEA
The private sector grew at 2.8%
It was the 11th consecutive quarter of
growth
The advance estimate is based on
partial data and is often substantially
revised
Posted April 28, 2012 on Ed Dolan’s Econ Blog http://dolanecon.blogspot.com
3. Expansion Continues
According to standard business cycle
terminology, the recession phase of the
business cycle is the downward
movement of GDP from its previous peak
The recovery phase is the upward
movement from the trough (low point) of
the recession and continues until GDP
again reaches its previous peak.
Once GDP moves above its previous
peak, the expansion phase begins.
Q1 2012 GDP was solidly above pre-
recession peak, continuing the expansion
that the economy entered in Q3 2011
Posted April 28, 2012 on Ed Dolan’s Econ Blog http://dolanecon.blogspot.com
4. Sources of US GDP Growth in Q3 2011
Table shows the contribution
of each sector to the 2.2% total
Consumption contributed 2.04 percentage GDP growth in Q1 2012
points to Q1 growth, up from 1.47 in Q4
Investment slowed, but inventory
investment accounted for much less of the
total in Q1 than in Q4
Government spending continued its steady
decline, led by defense cuts; state and local
government spending also fell
Export growth contributed .73 percentage
points, up from .37 in Q4. Net exports were
flat
Posted April 28, 2012 on Ed Dolan’s Econ Blog http://dolanecon.blogspot.com
5. Government Continues to Shrink
Posted April 28, 2012 on Ed Dolan’s Econ Blog http://dolanecon.blogspot.com
6. Nominal GDP A Little Above Trend, Gap Remains Large
Q1 nominal GDP (NGDP) growth was
3.8% (quarterly growth stated as
annual rate), the same as in Q4
NGDP growth consisted of 2.2% real
growth and 1.6% inflation
An increasing number of economists
focus on NGDP growth as a key policy
target. Real potential GDP growth has
averaged about 2.3 percent over the
past 10 years. Adding 2 percent for the
Fed’s target rate of inflation gives 4.3
percent. NGDP targeters could thus
make a case for a more stimulative
policy
Posted April 28, 2012 on Ed Dolan’s Econ Blog http://dolanecon.blogspot.com