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Visualizing GDP: Consumer Barely Treading Water.

  • Written by Syndicated Publisher 285 Comments285 Comments Comments
    August 28, 2011

    The chart below is my way to visualize real GDP change since 2007. I’ve used a stacked column chart to segment the four major components of GDP with a dashed line overlay to show the sum of the four, which is real GDP itself.

    My data source for this chart is the Excel file accompanying the BEA’s latest GDP news release(see the links in the right column). Specifically, I used Table 2: Contributions to Percent Change in Real Gross Domestic Product.

     

     

    Here is the previous version of the chart, showing the Q2 Advance Estimate. Personal consumption expenditures (PCE) furnished only 0.07 of last month’s 1.29 (rounded to 1.3) GDP estimate.

     

     

    Over the time frame of this chart, the PCE component has shown the most consistent correlation with real GDP itself. When PCE has been positive, GDP has been positive, and vice versa. PCE in the latest update came at 0.30 of the 0.99 real GDP (rounded to 1.0). This is a bit better than the Advance Estimate but clearly in a downtrend from Q4 2010.

    I’ll update this chart when the third estimate of Q2 GDP is released on September 29th. But the “real” story will be the following month, when we get our first glimpse of Q3 GDP.

    Images: Flickr (licence attribution)

    About The Author

    My original dshort.com website was launched in February 2005 using a domain name based on my real name, Doug Short. I’m a formerly retired first wave boomer with a Ph.D. in English from Duke. Now my website has been acquired byAdvisor Perspectives, where I have been appointed the Vice President of Research.

    My first career was a faculty position at North Carolina State University, where I achieved the rank of Full Professor in 1983. During the early ’80s I got hooked on academic uses of microcomputers for research and instruction. In 1983, I co-directed the Sixth International Conference on Computers and the Humanities. An IBM executive who attended the conference made me a job offer I couldn’t refuse.

    Thus began my new career as a Higher Education Consultant for IBM — an ambassador for Information Technology to major universities around the country. After 12 years with Big Blue, I grew tired of the constant travel and left for a series of IT management positions in the Research Triangle area of North Carolina. I concluded my IT career managing the group responsible for email and research databases at GlaxoSmithKline until my retirement in 2006.

    Contrary to what many visitors assume based on my last name, I’m not a bearish short seller. It’s true that some of my content has been a bit pessimistic in recent years. But I believe this is a result of economic realities and not a personal bias. For the record, my efforts to educate others about bear markets date from November 2007, as this Motley Fool article attests.
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