We have analyzed the recent GDP data released yesterday and there is some insight in the details.
First we present the GDP changes by quarter over the duration of the recession in the figure below. The results reiterate what we presented yesterday.
Second we show the changes in the domestic investment element of residential and non residential. The positive upswing in residential is heartening. It has been suggested that the reason for this is the home tax benefit but it is equally of more likely to be the low interest plus the bottoming of the market. Pressure due to high unemployment and continued uncertainty will keep this low however.
Third we show the Government elements, federal and state. There is a clear jump in federal and a continued decrease in state. The reason is uncertain because it was assumed the Stimulus would impact the states whereas it has not.
Fourth is personal consumption which is showing some life but still remains low.
Fifth is the trade element showing an increase in exports and decrease in imports. Perhaps this is a combined effect of the weakness in the dollar, the growth in other economies as well as the lagging demand in the US.
The main driver is still Federal Government spending yet the residential investment portion is a positive sign as is the export element.
First we present the GDP changes by quarter over the duration of the recession in the figure below. The results reiterate what we presented yesterday.
Second we show the changes in the domestic investment element of residential and non residential. The positive upswing in residential is heartening. It has been suggested that the reason for this is the home tax benefit but it is equally of more likely to be the low interest plus the bottoming of the market. Pressure due to high unemployment and continued uncertainty will keep this low however.
Third we show the Government elements, federal and state. There is a clear jump in federal and a continued decrease in state. The reason is uncertain because it was assumed the Stimulus would impact the states whereas it has not.
Fourth is personal consumption which is showing some life but still remains low.
Fifth is the trade element showing an increase in exports and decrease in imports. Perhaps this is a combined effect of the weakness in the dollar, the growth in other economies as well as the lagging demand in the US.
The main driver is still Federal Government spending yet the residential investment portion is a positive sign as is the export element.
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