Taking Stock of Our GDP Performance

Stock market declines are one thing, but economic growth is fundamental to our society.  Gross domestic product, the most widely used measurement, is the basic underlying factor governing employment, housing, consumption, private pension plans, public pension plans, and small business investment and corporate planning. That's why it's frustrating to see more attention given to GDP projections than the actual, achieved growth rate.  According to one economist, the Office of Management and Budget, between 2003 and 2010, was optimistic by 1.6 percentage points for the next year, and 1.8 points for the year after that.  And the projections were overly optimistic every time. When most businesses consider GDP growth in planning, they look forward two or three years, as investors are looking for a return over time.  I thought I would plot the actual US GDP growth rate not over one quarter at a time, but over two and half year, 10-quarter time periods, to smooth out the...(Read Full Post)

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