Recent U.S. Economic Growth

Recent U.S. Economic Growth

In Charts

MAY 2012

1 GROWTH SINCE 2009 The Growth Story Since 2009

Despite the worst financial crisis since the Great Depression and a series of shocks in its aftermath, the economy has gradually strengthened since mid-2009, though more work remains.

Real quarterly GDP growth

2009 Q3 1.7%

2009 Q4 3.8%

2010 Q1 3.9%

2010 Q2 3.8%

2010 Q3 2.5%

2010 Q4 2.3%

2011 Q1 0.4%

2011 Q2 1.3%

2011 Q3 1.8%

2011 Q4 3.0%

2012 Q1 2.2%

2009 Q2 -0.7%

Japanese earthquake/tsunami

Apr. 15, 2011 Government shutdown

narrowly averted

Debt limit

Aug. 2, 2011 Debt limit deal reached

2009 Q1 -6.7%

2008 Q4 -8.9%

2008/09 financial crisis

Source: Bureau of Economic Analysis, Wall Street Journal.

Feb. 2011 Egyptian President steps down

Libyan conflict begins President Obama ratchets up sanctions on Libya

Oil prices pass $90/barrel

High oil prices

Aug. 2011 Oil prices fall below $90/barrel

Early May 2010 Cost of borrowing spikes across Europe Euro falls to four-year low against the dollar

Oct. 2010 Greece, Ireland Portugal

bond spreads widen

European debt crisis

Jul. 2011 Greek, Irish, and Portuguese

spreads spike

High oil prices

Oct. 2011 Oil prices pass $90/barrel

Oct. 28, 2011 Italian 10y bond yields close above 6 percent, remain near or above that level through late Jan. 2012

U.S. DEPARTMENT OF THE TREASURY

2 GROWTH SINCE 2009 The Components of Growth Since 2009 U.S. economic growth has been led by consumption, private sector investment, and exports. Percentage point contribution to real quarterly GDP growth, by component

+10

+5

0

-5

-10

-15

Q1

Q2

Q3

2008

Source: Bureau of Economic Analysis.

Q4

Q1

Q2

2009

Personal consumption expenditures

Gross private domestic investment

Exports

Imports

Government consumption and gross investment Total GDP growth

Cumulative contributions to growth since 2009 Q2, by component

+8

+6 +4

+4.3 +3.8 +2.9

Total +6.8

+2

-0.7

0

-2

-4 -6

-3.5

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

2010

2011

2012

U.S. DEPARTMENT OF THE TREASURY

3 GROWTH SINCE 2009 International Growth Growth in the U.S. has outpaced that of other advanced economies affected by the global financial crisis. Real GDP, 2008 Q1 = 100

104

102

U.S.

Germany

100

98

Euro area

Japan

96

U.K.

94

92

90

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2008

2009

2010

2011

2012

Source: Regional sources (see Notes section).

U.S. DEPARTMENT OF THE TREASURY

4 UNWINDING THE CRISIS Wealth, Savings, and Private Demand Despite challenges, growth in private demand has outpaced GDP growth since late 2010.

Household net worth, inflation-adjusted (constant 2011 dollars)

$8800 trillion 70

recession

60

Year-on-year percent change in real GDP and final sales to private domestic purchasers

4%

Growth in real GDP

50

-$19.3 trillion

2%

40

2007 Q2 - 2009 Q1

30

20

Household

10

wealth

1

Household wealth has begun to

0%

come back from a sharp decline

in 2007-08, but has not fully

returned...

0

-2%

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11

3

Household debt and savings as a percent of disposable income

Despite these drags

150% 140% 130% 120% 110%

recession

Household debt-to-income

(left axis)

8% -4%

7%

6%

5% 4% -6% 2 ...and families are 3%

on spending, private demand has begun to show stronger growth as the overhang of the financial crisis fades.

100% 90%

Household savings rate

saving more than before the crisis.

2%

1% -8%

(right axis)

2006

'07

'08

80%

0%

Q1

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11

Growth in final sales to private

domestic purchasers

recession

'09

'10

'11

'12

Source: Federal Reserve Flow of Funds, Bureau of Economic Analysis.

U.S. DEPARTMENT OF THE TREASURY

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