Q2 Real GDP Grew 1.5 Percent; Q1 Revised to 2 Percent

That’s a trajectory from disappointed to worse, in the real GDP numbers. Perhaps some interesting analysis of the sectoral breakdowns later. One constant word of caution is to not put too much stock in the initial GDP estimates, which tend to get revised a lot. Which is to say that even though the Q2 number is worse than the Q1 number, the Q1 number is probably the “real” bad news here if only because it’s much more likely to be accurate.

In nominal terms, we got a 4.2 percent increase in aggregate spending in Q1 and a deceleration to 3.1 percent in Q2. Recall that during the “Great Moderation” nominal GDP rose at about 5 percent a year. Not only did we plunge way off that trend during the crash of 2008, but we’ve tended to sporadically lose ground during the subsequent recovery.