{"id":246521,"date":"2010-01-29T10:10:21","date_gmt":"2010-01-29T15:10:21","guid":{"rendered":"tag:business.theatlantic.com,2010:\/\/3.34975"},"modified":"2010-01-29T12:39:47","modified_gmt":"2010-01-29T17:39:47","slug":"gdp-soars-5-7-but-heres-the-chart-you-should-look-at","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/246521","title":{"rendered":"GDP Soars 5.7%, But Here’s the Chart You Should Look At"},"content":{"rendered":"

U.S. GDP in the last three months of 2009 soared by 5.7%. That’s good news, but the number doesn’t tell the whole story. Dan digs<\/a> into the figure to find out what’s growing and what isn’t, but to get a more complete picture of our economic growth, check out the Chicago Fed National Activity Index (NAI) — what Barry Ritholz calls “the best economic indicator you’ve never heard of.”<\/p>\n

The newest NAI report on 2009’s fourth quarter is out, and it’s not as sanguine as GDP.<\/p>\n

Here’s the chart:<\/p>\n

\"\"<\/a><\/span><\/p>\n

\nWhat’s happening here? The short version is this: The economy started
\nto rally dramatically last summer, but the recovery has stalled since
\nSeptember. <\/p>\n

Here’s the longer, more informative version. NAI tracks 85 economic
\nindicators, which lumped into four big categories: production and
\nincome (P&I); employment, unemployment, and hours (EU&H);
\npersonal
\nconsumption and housing (C&H); and sales, orders, and inventories
\n(SO&I). The graph below explains how these categories performed in
\nthe second half of 2009.<\/p>\n

\"NAI.png\"<\/a>Some
\nlessons from this chart: Production has been positive for six months.
\nEmployment continues to languish. This shouldn’t surprise us. Not only
\ndoes GDP improve faster than employment, but also Larry Summers
\nadmitted to the New Yorker that the stimulus plan specifically targeted production over jobs<\/a>. (Megan will have more on the prospects of a jobless recovery later today….) <\/p>\n

I would be particularly concerned about what the chart says about the
\nconsumer and housing markets. The C&H figure barely budged from
\nnear recession levels (the NAI considers figures below -0.70 consistent
\nwith a recession) in the last six months of 2009. Consumer spending
\ncontinues to be anchored down by broad unemployment. The housing market
\nhad a particularly rough December — new home sales fells and
\nforeclosures, defaults and delinquencies continued to rise<\/a>.  <\/p>\n

On the bright side, sales, orders and inventories are up in the NAI —
\nand have been near positive growth levels for most of the last six
\nmonths. This also fits with today’s GDP report that found that changes
\nin real private inventories made up 3.4% of the 5.7% growth.


\n

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U.S. GDP in the last three months of 2009 soared by 5.7%. That’s good news, but the number doesn’t tell the whole story. Dan digs into the figure to find out what’s growing and what isn’t, but to get a more complete picture of our economic growth, check out the Chicago Fed National Activity Index […]<\/p>\n","protected":false},"author":1534,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-246521","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/246521","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1534"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=246521"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/246521\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=246521"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=246521"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=246521"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}