Download Q1 Real GDP Per Capita: -0.05% Versus the 0.7% Headline Real GDP

Q1 Real GDP Per Capita: 0.54% Versus the
1.2% Headline Real GDP
May 26, 2017
by Jill Mislinski
of Advisor Perspectives
The Second Estimate for Q1 GDP came in at 1.2% (1.15% to two decimals), down from 2.1% in the
Third Estimate of Q4 GDP. With a per-capita adjustment, the headline number is lower at 0.54% to
two decimal points.
Here is a chart of real GDP per capita growth since 1960. For this analysis, we've chained in today's
dollar for the inflation adjustment. The per-capita calculation is based on quarterly aggregates of midmonth population estimates by the Bureau of Economic Analysis, which date from 1959 (hence our
1960 starting date for this chart, even though quarterly GDP has is available since 1947). The
population data is available in the FRED series POPTHM. The logarithmic vertical axis ensures that the
highlighted contractions have the same relative scale.
The chart includes an exponential regression through the data using the Excel GROWTH function to
give us a sense of the historical trend. The regression illustrates the fact that the trend since the Great
Recession has a visibly lower slope than the long-term trend. In fact, the current GDP per-capita is
9.9% below the pre-recession trend.
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The real per-capita series gives us a better understanding of the depth and duration of GDP
contractions. As we can see, since our 1960 starting point, the recession that began in December
2007 is associated with a deeper trough than previous contractions, which perhaps justifies its
nickname as the Great Recession.
Quarterly GDP Compounded Annual Rate of Change
The standard measure of GDP in the US is expressed as the compounded annual rate of change from
one quarter to the next. The current real GDP is 1.15%. But with a per-capita adjustment, the data
series is lower at 0.54%. The 10-year moving average illustrates that US economic growth has slowed
dramatically since the last recession.
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Year-Over-Year GDP and Recession Risk
Economists and financial journalists vary widely in their opinions about the current level of recession
risk. The official call on recessions, of course, is the domain of the National Bureau of Economic
Research, which makes the determination on recession start and end several months — sometimes
more than a year — after the fact.
GDP per capita, as we've seen, is a weaker series than GDP. What does it suggest about our current
recession risk? The next chart shows the YoY change in real GDP per capita since 1960. We've again
highlighted recessions. The red dots show the YoY real GDP for the quarter before the recession
began, and the dotted line gives us a sense of how the current level compares to recession starts since
1960.
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The current YoY at 1.34% is above the 1.32% average value of the eight recession starts in the chart
above.
How do the two compare YoY series compare, GDP and GDP per capita? Here is an overlay of the two
in the 21st century.
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Other GDP updates:
Latest GDP Update
Visualizing GDP
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