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Wednesday, May 4, 2016
3/5/16: U.S. Recovery: It's Poor, Judging by Historical Comparatives
Recent research note from Deutsche covering the U.S. economy posted an interesting chart on the U.S. growth dynamics since 1980:
The note, of course, makes the point about volatility of the GDP growth in the current recovery not being out of the ordinary. But the average rate of growth in the chart above is. Which means one little thingy: the average rate of growth is structurally lower in the present episode than in the previous three post-recession recoveries. And that is before we look at the peak-to-trough falls in GDP during the recession which was more dramatic than in any previous recession plotted in the chart. Average rate of growth in the current recovery falls outside the -1STDEV range for two out of three previous recoveries.
So here we have it: recovery is not robust. Not even strong. It is, quite frankly, very poor.
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“It is not true that people stop pursuing dreams because they grow old, they grow old because they stop pursuing dreams.” Gabriel García Márquez
Nassim Nicholas Taleb was asked whether public protests in Athens is a Black Swan Event. He replied: “No. The real Black Swan Event is that people are not rioting against the banks in London and New York.”
"Getting worse more slowly is not the same as getting better", Prof. Brad DeLong