visualising GDP: The Consumer Is Key -- And 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.

chart

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.

chart

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.

Published at Advisor Perspectives.

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