GDP went up at a 2.5% annual pace last quarter, which is pretty decent — wasn’t “austerity” supposed to kill us? We’re now back to GDP level we were at … almost four years ago. Yes, it’s time to party like it’s Q4 2007. An important point, jumped out at me, however:
real GDP is finally back to its pre-recession peak, and it’s taken us an historically very long time to get here. The figure (hat tip, BH) shows the number of quarters it has taken in the past for real GDP growth to regain its prior peak before the recession knocked it down (the top date on the x-axis is the quarter that GDP regained the peak; the bottom date is the prior peak). The average is 5.2 quarters…this go round, it took 15. That, my friends, is a long slog.
It was, is and is going to be. We are still too leveraged and our national finances have a biohazard sign on them. We are slowly unravelling the mess we were in — housing prices have fallen, as has debt. Maybe we can see some light. But we’re nowhere near the end; not with so many unemployed.