I’m still getting caught up on things from my 2-week hiatus, so this news is a bit stale. But it’s worth visiting again since the Bureau of Economic Analysis (BEA) only reports on GDP without expressing it in per capita terms. What matters is not the size of the pie, but the size of your slice of the pie.
On April 27th, the BEA released its advance estimate of 1st quarter GDP. It rose at an annual rate of 2.2%. That’s a bit of a slowdown from the 3.0% rate in the fourth quarter of last year. Of that 2.2%, a boost in motor vehicle output accounted for half – 1.1%. Rising inventories accounted for 0.6%.
However, expressed in per capita terms, real GDP rose by only 1.29%, thanks to the U.S. population growing in the first quarter at an annual rate of 0.9%. As you can see from the following chart, real per capita GDP remains approximately $1,000 per person below the level reached before the recession. It’s at approximately the same level as in the 1st quarter of 2006. Here’s the chart: Real Per Capita GDP
This anemic growth is in spite of nearly $3 trillion in stimulus poured into the economy by the federal government and the Federal Reserve over the past three years.
This 1st quarter growth in per capita GDP bucks my prediction that it would “decline throughout the year.” But not by much. The economy was slowing noticeably by the end of the first quarter, so a slowdown in the 2nd quarter should surprise no one.