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Private Sector vs. Government Sector in the Current Economic Recovery

Economics / Economic Recovery Mar 01, 2012 - 06:29 AM GMT

By: Asha_Bangalore

Economics

Real GDP of the economy is estimated to have grown at an annual rate of 3.0% in the fourth quarter, an upward revision from the advance estimate of a 2.8% increase. Upward revisions of consumer spending, outlays of structures, residential investment expenditures and government spending more than offset downward revisions of exports and equipment and software spending to yield a slightly higher reading of real GDP growth for the fourth quarter of 2011.


The U.S. economy has advanced for ten straight quarters after the recession ended in June 2009, with the private sector pulling the engine rather than the government. Chart 2 is an indexed chart where the level of private sector and government outlays are set equal to 100 at the trough of the recession (2009:Q2) and the two components are computed for quarters before and after the recession. A reading of 102 denotes a 2.0% increase from the trough, while a reading of 97stands for a 3.0% decline. As seen in Chart 2, at the end of 10 quarters of economic growth, private sector spending has risen 8.5% from the trough, while the combined outlays of federal, state, and local governments dropped 3.6%.


Asha Bangalore — Senior Vice President and Economist

http://www.northerntrust.com

Asha Bangalore is Vice President and Economist at The Northern Trust Company, Chicago. Prior to joining the bank in 1994, she was Consultant to savings and loan institutions and commercial banks at Financial & Economic Strategies Corporation, Chicago.

Copyright © 2012 Asha Bangalore

The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

ernie messerschmidt
01 Mar 12, 18:42
jobless "recovery" is bs

I think these stats lie. Jim Willie says rail freight has been down all over N. America for the past four years. That's a stat that shows the truth -- continued recession = depression. Besides that, any "jobless recovery" is a farce. Maybe the big corps and banks are back in the bucks, but not the ordinary person.


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