Fast Company

Growth Deconstructed

The latest GDP figures from the federal government show a 2.8 percent annualized growth (found here). Unfortunately, this may be the last positive figure we see for a while, so it might be worth examining the details. Below is a chart I put together routinely for the Kauffman Foundation's blog, growthology.org, and which I will switch over to Fast Company for this initial post:

Deconstructing GDP growth uses data from BEA's release Table 2, which details percentage contributions to overall GDP. For example, exports may have "added" 1.54 percent to the 2.8 percent of total GDP growth - which is represented in chart - even though export growth is actually rising at 12+ percent rate annually.  It shows up as a small contribution because exports are only one tenth of total GDP.  In the BEA's words from last Friday's report:

"The acceleration in real GDP growth in the second quarter primarily reflected a larger decrease in imports than in the first quarter, an acceleration in exports, a smaller decrease in residential fixed investment, an acceleration in nonresidential structures, an upturn in state and local government spending, and an acceleration in PCE that were partly offset by larger decreases in inventory investment and in equipment and software."

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