GDP: The Consumer Is Key, And Is Barely Treading Water

The chart below is my way to visualise 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 per cent Change in Real Gross Domestic Product.

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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 0.49 of the 1.34 real GDP (rounded to 1.3). This is a bit better than the Advance and Second Estimates but clearly in a downtrend from the last two quarters.

I’ll update this chart when the Advance Estimate of Q3 GDP is released on October 27th.

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